A taxpayer recently appealed against a decision by HMRC to charge them tax on their redundancy payment and lost the appeal, resulting in HMRC asking the taxpayer to reimburse the expenses they incurred.
The taxpayer appealed against the charge by saying that some of these expenses would have been avoided if HMRC had been more efficient in dealing with the taxpayer before starting tribunal proceedings. The taxpayer suggested that each party should pay their own expenses because they had no control over the actions of HMRC or the associated costs. The taxpayer also felt that they might not have pursued the matter further or in the same way if they had been aware of certain information from HMRC that only came to light after the proceedings had begun.
The ruling stated that the taxpayer would be liable for some expenses due to having lost the appeal. However, when taking all the circumstances into account, it would not be fair to expect them to pay the full £3,499.40 that had been accrued, so the decision was made that they should reimburse HMRC no more than £1,000.
Note: Every case is different and relates to its own specific circumstances, which may affect the success of any appeal.