Gigabiz Ltd & Ors v The Commissioners for HMRC
[2023] UKFTT 693 (TC)
Essex Trading Limited v The Commissioners for HMRC
17 January 2024
[2024] UKFTT 69 (TC)
First-tier Tribunal
A company (ETL) asked HMRC for some documents. HMRC said no. The judge said HMRC was being unreasonable and had to pay ETL's legal fees (£3461.50) because their reasons for refusing the documents were wrong.
Key Facts
- •Essex Trading Limited (ETL) applied for specific disclosure from HMRC.
- •HMRC opposed the application.
- •ETL applied for costs under Rule 10 of the Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009, arguing HMRC's opposition was unreasonable.
- •The application was heard and decided on the papers.
- •The dispute centered on the ownership of seized alcoholic products and whether ETL was liable for duty and penalties.
- •A key issue was the relevance of documents relating to a claim by Hi Line Wines Limited (Hi Line), a company from which ETL purchased stock, for restoration of seized goods.
Legal Principles
Whether a party acted unreasonably in bringing, defending, or conducting proceedings (Rule 10(1)(b)).
Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009, Rule 10
The test for unreasonable conduct is lower than "wholly unreasonably" and considers the standard of handling the case, not the quality of the original decision.
Distinctive Care Ltd v HMRC [2018] UKUT 155 (TCC), [2019] EWCA Civ 1010; Market & Opinion Research International Limited v HMRC [2015] UKUT 0012 (TCC)
Reasonableness is assessed by reference to the facts and circumstances at the time of the acts (or omissions) and not with the benefit of hindsight.
Distinctive Care Ltd v HMRC [2018] UKUT 155 (TCC), [2019] EWCA Civ 1010; Invicta Foods Limited v HMRC [2014] UKFTT 456 (TC)
HMRC's power to disclose confidential information under section 18(2)(c) CRCA for the purposes of civil proceedings.
Commissioners for Revenue and Customs Act 2005, section 18(2)(c); Mitchell and anor v HMRC [2023] EWCA Civ 261; Good Law Project v HMRC [2019] EWHC 3125 (Admin)
Outcomes
HMRC ordered to pay ETL's costs.
HMRC acted unreasonably in opposing ETL's application for specific disclosure on the grounds of confidentiality and irrelevance. Their arguments on confidentiality were unsustainable given section 18(2)(c) CRCA and their arguments on irrelevance were misleading and based on a misrepresentation of the facts.
Costs summarily assessed at £3461.50.
This amount was deemed reasonable, reasonably incurred and proportionate to the issues. Adjustments were made to Mr. Thornton's hourly rate and the time spent on administrative tasks.