Following an unsuccessful appeal before the First-tier Tribunal at which the drinks maker Innocent claimed its smoothies were not beverages and should be zero-rated, HMRC applied for costs.
The department did so on the basis the case was exceptional, substantial and complex, involved a large sum of money, and was comparable to a High Court hearing.
The appellant objected, saying the appeal had involved a single pre-hearing review and directions the parties had largely agreed, and had involved one simple question.
The First-tier Tribunal agreed with the Revenue that the appeal had been exceptional, with tax of £27 million at stake.
The judge noted that junior counsel and leading counsel had been called, along with an expert witness: these were the kind of resources that would be expected in a High Court case.
HMRC’s application for costs was allowed.
