V5.483 Costs awarded to HMRC

Commissioners' policy in relation to costs pre-1 April 2009

Although appellants have usually applied for costs where they have been wholly or substantially successful, HMRC appears to have exercised considerable restraint in similar circumstances. HMRC's policy1 with regard to costs prior to 1 April 2009 was outlined by Mr Robert Sheldon in a parliamentary answer:

'the Commissioners have concluded that, as a general rule, they should continue their policy of not seeking costs against unsuccessful appellants; however, they will ask for costs in certain cases so as to provide protection for public funds and the general body of taxpayers. For instance, they will seek costs at those exceptional tribunal hearings of substantial and complex cases where large sums are involved and which are comparable with High Court cases, unless the appeal involves an important point of law requiring clarification. The Commissioners will also consider seeking costs where the appellant has misused the tribunal procedure—for example, in frivolous or vexatious2 cases, or where the appellant has failed to appear or to be represented at a mutually arranged hearing without sufficient explanation, or where the appellant has first produced at a hearing relevant evidence which ought properly to have been disclosed at an earlier stage and which could have saved public funds had it been produced timeously3'.

This statement of policy was reaffirmed by Mr Brooke in a further parliamentary answer, and the following additional statement made:

'The new penalty provisions and right of appeal to the value added tax

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