No costs

The Upper Tribunal allowed an HMRC appeal against the First-tier Tribunal’s decision that building work fell within VATA 1994 s 35 (refund of VAT to persons constructing certain buildings). The Revenue subsequently sought a direction from the Upper Tribunal that the taxpayer be required to settle the department’s costs.

The taxpayer said it would be unfair to make him pay. He pointed out he had represented himself at both tribunals whereas HMRC had been represented by a solicitor and counsel at the Upper Tribunal – which noted that the First-tier Tribunal’s decision had been overturned in part because the judge considered that the tribunal had made an error.

Had the taxpayer’s original appeal failed he would have incurred no costs because each party bears its own costs at that stage (except in certain circumstances). It would however be equally unfair for a successful litigant –...