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R, A and M Gardiner (TC4320)
The three taxpayers sought costs after their May 2014 success before the First-tier Tribunal, which found the Revenue had failed to produce evidence of its assertion that the taxpayers had been negligent in relation to a tax-planning scheme.
The main reason for the costs claim was unreasonable conduct by HMRC.
The First-tier Tribunal in the latest instance said it was clear from the notice of appeal that the Revenue was “being put on strict proof of negligence” that clearly required evidence – without which there was no chance the department could have succeeded.
It was unreasonable conduct on the part of HMRC to defend the appeal without intending to produce evidence to establish negligence. As a result, the tax authority should pay the taxpayers’ costs.
