In Stomgrove Ltd v HMRC (TC03307 – 5 February 2014) the tribunal had to decide on the taxpayer’s liability to costs in a complex case.
Stomgrove contended that HMRC should be liable to costs in full as it had been unreasonable in making a determination that Stomgrove should pay class 1 NIC in the first place. Referring to Catana [2012] STC 2138 the tribunal held that costs incurred before the proceedings had commenced could not be regarded as incidental to the proceedings. Consequently the tribunal did not have jurisdiction to make an award in relation to these costs (TCEA 2007 s 29(1) and the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules SI 2009/273 rule 10).
As far as the claim for costs ‘on an indemnity basis’ was concerned the tribunal accepted that costs incurred before the proceedings could be recovered. However the...
