Practical approach to tax litigation costs

KEY POINTS

• Costs may not be an issue in simpler cases before the First-tier Tribunal.
• The tribunal has the authority to award costs in complex cases.
• The successful party must apply for costs but the loser must have the opportunity to argue against them.
• Importance of maintaining detail records.

If a tax dispute cannot be settled the taxpayer may choose to appeal to the tax tribunals and the higher courts if necessary. From the start the issue of how to fund such litigation must be considered.

The majority of costs will be incurred at the First-tier Tribunal because it is where the facts of the case must be examined as well as the legal arguments. The Upper Tribunal has a discretionary power to award costs in proceedings transferred by or...