The figure for 2016, outlining the number of taxpayers challenging HMRC decisions in the courts, is up 18% on 2015 when 76 judicial reviews were taken.

The increase in the number of reviews ‘adds weight’ to concerns about how HMRC is operating, RPC claims.

It added that this highlights HMRC’s ‘controversial power’ on the strategy of issuing Accelerated Penalty Notices (APNs).

APNs allow HMRC to request disputed tax payments upfront within 90 days without any right of appeal.

Some 70,000 APNs have been issued so far, bringing in an extra £3bn in tax. HMRC uses APNs to combat what it views as abusive tax avoidance.

Other areas highlighted by RPC as prevalent for HMRC-related reviews include:

•  conduct notices;
• residency of taxpayers; and
•  reclaiming of incorrectly charged VAT.

‘HMRC has a duty to act fairly and lawfully, but more and more taxpayers are finding that it is falling short of the mark,’ said RPC lawyer Adam Craggs.

‘With the new powers it has gained in the last few years, it is important that HMRC exercises its powers in a reasonable manner.

‘HMRC has also recently been criticised by judges in judicial reviews for not co-operating fully by disclosing documents that might damage its case.’

From HMRC’s perspective, it says that the new powers give it the ability to close the tax gap.

An HMRC spokesman said: ‘Accelerated payments have changed the economics of tax avoidance by requiring those under investigation for tax avoidance to pay the disputed tax upfront, putting them in the same position as the majority of taxpayers who pay first and dispute later.

‘HMRC has won all five judicial reviews decided by the courts on the accelerated payments regime.’

Report by Kevin Reed