The taxpayer is a company based in Northern Ireland of which Henry Donaldson is the director. It appealed to the First-tier Tribunal against HMRC’s decision to deny credit for input tax on the basis that it knew or should have known that the transactions in question were connected with fraud.
The tribunal allowed the appeal in relation to around 90% of the VAT denied. The appeal had been allocated as ‘complex’ and the taxpayer had not opted out of costs. It applied to the tribunal for an order that its costs be paid by HMRC. The tribunal refused on the basis that there was no ‘clear winner’ some of Mr Donaldson’s evidence had been untruthful and he had conducted the litigation ‘tactically’ and failed to act with candour.
The taxpayer was granted permission to appeal against the costs decision on the ground that the First-tier Tribunal had erred...
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