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HMRC internal manual

Appeals reviews and tribunals guidance

HM Revenue & Customs
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First-tier and Upper Tribunals: The tribunal hearing: Tribunals right to award costs - Upper Tribunal

The Upper Tribunal can only make an award for costs

  • on appeals from a decision of the First-tier Tax Chamber, or
  • where a case has been referred by or on appeal from another tribunal in the same circumstances and to the same extent as the First-tier Tribunal above, or
  • in judicial review proceedings, see ARTG12000 onwards, or
  • in proceedings transferred from the Tax Chamber of the First-tier Tribunal, or
  • if it thinks that either the customer or HMRC or their representative acted unreasonably in bringing, defending or conducting the proceedings, or
  • in relation to s29(4) TCEA 2007 (wasted costs).

The Upper Tribunal may make an order for costs on an application from a party or on its own initiative.

Applications for costs

A person may apply for costs by writing to the Upper Tribunal and to the person against whom they are applying for the costs order to be made. Their application should include a schedule of costs claimed. They can apply at any time during the proceedings but within one month of

  • the Upper Tribunal’s notice of decision, or
  • any notice of withdrawal which settles the matter.

The Upper Tribunal may not make an order for costs or expenses against a person without first giving that person an opportunity to make representations.

In addition, where

  • an appeal has been transferred from the First-tier Tax Chamber to the Upper Tribunal at first instance, or
  • the Upper Tribunal is considering a judicial review, or
  • costs are being sought on the grounds of a party’s unreasonable behaviour

the Upper Tribunal cannot make an order relating to costs against either the customer or HMRC without taking into account their means (if an individual).

The Upper Tribunal does not have to consider an individual’s means if the case before the Upper Tribunal is an appeal against the decision of the First-tier Tribunal.

Amount of costs

The amount of costs to be paid can be arrived at

  • by decision by the Upper Tribunal
  • by agreement between the paying and receiving persons
  • by assessment of all or part of the costs incurred by the receiving person, if not agreed.

Where there has been an assessment of all or part of the costs incurred by the receiving person, if not agreed, as set out in the bullet above, either the paying or receiving person can apply to

  • the county court, the High Court or the Costs Office of the Supreme Court (in England and Wales) for a detailed assessment of costs
  • the Auditor of the Sheriff Court or Court of Session (in Scotland) for the taxation of expenses
  • the Taxing Office of the High Court of Northern Ireland.

In certain circumstances, HMRC may be prepared to consider waiving any claim to costs before the Upper Tribunal or appellate courts, see ARTG8670.

Applications for costs by Solicitor’s Office following decision by Upper Tribunal or Appellate Court

The Solicitor’s Office usually apply for costs in all successful cases and costs will generally follow the event before the Upper Tribunal and the higher Courts. Any decision to waive costs would involve similar criteria to those considered by TAA when applying the Rees Practice. But Solicitors Office may also consider other factors such as:

  • whether the customer has been cooperative during the hearing process, or whether they have been obstructive and difficult
  • the importance of the legal issues under consideration and their wider significance over and above the immediate appellant.