In Distinctive Care v HMRC [2018] UKUT 155 (15 May 2018) the UT found that HMRC’s unreasonable behaviour prior to the start of the proceedings was not relevant when deciding whether an award for costs should be made under the FTT procedure rules r 10.
HMRC had issued Distinctive Care (DC) with an information notice (FA 2008 Sch 36). DC had appealed and HMRC had subsequently withdrawn the information notice and notified the FTT that it would not defend the appeal. By then HMRC’s central policy team had confirmed (having changed its view) that an information notice could not be issued following a determination. DC had then submitted a claim for costs in the sum of £2 500 on the basis of unreasonable behaviour by HMRC. The appeal was categorised as ‘basic’ so unless HMRC had behaved unreasonably the tribunal has no jurisdiction to award costs....
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