Revenue’s legal costs soar

HMRC paid £2.5m in legal costs for cases it lost against taxpayers in 2019-20 according to a freedom of information request by Pinsent Masons.

This represents an 88% increase from 2018-19 when the department’s legal costs reached £1.3m. The law firm suggests this rising average is because HMRC is losing more complex and drawn-out cases against taxpayers where the taxpayer’s legal costs are much higher.

The costs HMRC had to pay relate to 43 cases found in favour of taxpayers in 2019-20 equivalent to an average of £58 277 a case. In 2018-19 the average cost was £39 014 for each of the 34 cases it lost.

Steven Porter partner at Pinsent Masons said: ‘The rise in the number of cases where taxpayers were awarded costs may suggest HMRC has been too bullish in some of the cases it has chosen to litigate.’

He suggested this may be due...