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Unnecessary expense

24 March 2014
Issue: 4445 / Categories: Tax cases , Admin

Softhouse Consulting Ltd v CRC, Upper Tribunal

The taxpayer company appealed against HMRC’s refusal to give credit for input tax.

The First-tier Tribunal dismissed the appeal, agreeing with the Revenue that the taxpayer knew or should have known the transactions had a connection to fraud.

The First-tier Tribunal turned down the company’s application to appeal to the Upper Tribunal. The business applied on paper directly to the Upper Tribunal but was refused, so exercised its right to an oral hearing, where the application for an appeal was again rejected.

The tax department applied for its costs in attending the oral hearing.

The Upper Tribunal ruled HMRC had a legitimate interest in the outcome of the hearing, but that make it reasonable to go to the expense of protecting it.

The Revenue could instead have chosen to rely on the experience and expertise of the tribunal judges, given the taxpayer’s previous lack of success.

HMRC’s application for costs was dismissed.

Issue: 4445 / Categories: Tax cases , Admin
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