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Costs allowed due to HMRC’s unreasonable conduct

21 June 2024
Issue: 4942 / Categories: Tax cases
A Ahmed (TC9110)

In December 2023 having succeeded in his appeal the taxpayer applied to the First-tier Tribunal for costs.

Broadly his appeal had concerned a discovery assessment issued by HMRC to recover tax that had arisen due it claimed to the taxpayer’s careless behaviour. The tribunal in an extempore decision found that the taxpayer had taken reasonable steps through his advisers to notify HMRC of the written off loans and the resulting increase in his tax liability. It therefore allowed the taxpayer’s appeal.

The taxpayer applied for his costs on the basis that HMRC had the information it had needed through his accountants. It was therefore persisting with an argument that he had been careless which it knew from the evidence could not succeed. HMRC said just because its argument was unsuccessful it did not follow that it had acted...

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