Costs' application

The taxpayer companies put in a claim for input VAT of about £18 million. HMRC refused the claim so the taxpayers appealed to the tribunal which found for HMRC. The tribunal also ordered the taxpayers to pay HMRC's costs.

HMRC applied for security in respect of the costs on the basis that the companies were insolvent and had ceased to trade and would be unable to pay the costs in the event that they lost before the High Court.

The taxpayers argued that VATA 1994 s 84 contained an exhaustive list relating to costs applications and that HMRC's application was therefore misconceived. Furthermore the application would stifle their appeal.

Mr Justice Briggs in the High Court said that s 84 had nothing to do with appeals to the High Court rather it related only to VAT tribunal appeals.

Therefore the taxpayers' submission could...