Gigabiz Ltd & Ors v The Commissioners for HMRC
[2023] UKFTT 693 (TC)
Brijesh Patel v The Commissioners for HMRC
13 February 2023
[2023] UKFTT 128 (TC)
First-tier Tribunal
Mr. Patel won his tax case against the government. He'll get his legal fees back, but he has to give the government a better bill first, as his original one wasn't detailed enough. Both sides made mistakes which led to delays and extra costs.
Key Facts
- •Mr. Patel appealed HMRC's excise duty assessments totaling £941,756.
- •Mr. Patel applied for a hardship certificate, initially refused by HMRC but later granted by the Tribunal.
- •HMRC applied for a stay of proceedings pending a criminal investigation, which was granted for several years.
- •Criminal proceedings were not initiated, and HMRC subsequently sought to strike out the appeal.
- •The Tribunal refused to strike out the appeal and directed the determination of the hardship application.
- •Hardship was ultimately granted to Mr. Patel, and the appeal was allocated to the complex track.
- •HMRC withdrew the assessments, leading to the appeal being allowed.
- •Mr. Patel applied for costs of £48,858.
Legal Principles
Award of costs in complex track cases.
Tribunal Courts and Enforcement Act 2007 (TCEA) s.29 and FTT Rule 10.
Meaning of 'entertain' in relation to appeals pending hardship determination.
Finance Act 1994 (FA 1994) s.16(3).
Tribunal's power to award costs prior to allocation to complex track.
Capital Air Services v HMRC [2011] STC 617.
Assessing unreasonable conduct of parties.
Distinctive Care Ltd v HMRC [2018] UKUT 155 (TCC), Market & Opinion Research International Limited v HMRC [2015] UKUT 0012 (TCC).
Requirements for a compliant schedule of costs.
FTT Rule 10(3)(b), CPR Part 44, Distinctive Care Ltd v HMRC [2018] UKUT 155 (TCC).
Outcomes
Mr. Patel is entitled to costs.
The appeal was in the complex track, and the general rule is that the successful party receives costs. The Tribunal has discretion to award costs incurred before allocation to the complex track.
Mr. Patel must submit a compliant schedule of costs.
The initial schedule was insufficiently detailed to allow a summary assessment.
Costs incurred before hardship was awarded are recoverable.
The appeal had been started, even if not fully 'entertained' until hardship was determined.
Costs relating to the strike-out application are not recoverable.
Mr. Patel's failure to diligently pursue the hardship application made the strike-out application necessary.
Costs incurred for the hardship hearing itself are not recoverable.
HMRC did not oppose the application, and an oral hearing was unnecessary.
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