No costs

HMRC case withdrawn after evidence

In a hearing described by the First-tier Tribunal judge as ‘somewhat strange’ the taxpayer appealed against penalties imposed by HMRC for alleged breaches of four regulations in the Money Laundering Regulations SI 2007/2157.

The first morning was taken up by an unsuccessful application by the taxpayer to have the hearing postponed. In the afternoon HMRC opened its case but counsel for the taxpayer objected to some of the evidence which it withdrew. Taxpayer’s counsel then cross-examined the HMRC officer who had carried out the investigation. She then asked for an adjournment and on resumption HMRC withdrew its case. The taxpayer’s appeal therefore succeeded.

Taxpayer’s counsel then applied for costs on the ground HMRC been unreasonable in bringing the proceedings. HMRC made representations as to why costs should not be awarded.

First it said the reason for withdrawing the case...