Unwise decision

The taxpayer company appealed against a determination in respect of class 1 National Insurance (NI). The appeal was allocated by the First-tier Tribunal as a complex case which HMRC decided not to contend.

The taxpayer applied for costs of £4 993 in respect of work carried out by its accountant saying the Revenue had been unreasonable in demanding NI contributions.

The tax authority did not object to the First-tier Tribunal making an order for costs in the firm’s favour but said the amount claimed was excessive and offered to pay £4 500.

HMRC claimed costs after the taxpayer refused the department’s offer to settle the company’s claim.

The tribunal referred to Catana v CRC [2012] STC 2138 the result of which meant costs incurred before appeal proceedings must be excluded.

The judge said the Revenue’s behaviour had not been unreasonable: the hourly rate claimed by the accountant...