R & C Commissioners v Talentcore Ltd (t/a Team Spirits)
| Jurisdiction | UK Non-devolved |
| Judgment Date | 29 November 2011 |
| Date | 29 November 2011 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
Upper Tribunal (Tax and Chancery Chamber).
Roth J.
Adam Tolley and Kate Balmer (instructed by the Solicitor to HM Revenue and Customs) for the appellants.
Jeremy Woolf (instructed by David Jones & Co, accountants) for the respondent.
The following case was referred to in the ruling:
Agassi v Robinson UNKTAXWLR[2005] EWCA Civ 1507; [2006] BTC 3; [2006] 1 WLR 2126
Procedure - Costs - Upper Tribunal - Income tax and National Insurance contributions - Upper Tribunal upholding taxpayer's case that workers supplied to act as consultants in airport duty free shops not employees - Taxpayer applying for summary assessment of costs - Counsel instructed by taxpayer's accountants - HMRC seeking detailed assessment or substantial reduction - Taxpayer entitled to 80 per cent of costs on summary assessment - Tribunal Procedure (Upper Tribunal) Rules 2008, r. 10(8)(c), 11(1), (2), (9).
This was an application by the taxpayer for its costs after the Upper Tribunal ([2011] UKUT 423 (TCC); [2011] BTC 1,869) upheld a decision of the First-tier Tribunal ([2010] UKFTT 148 (TC); [2010] TC 00454) that workers supplied to act as consultants in airport duty free shops were not employees.
The taxpayer applied for its costs, attaching a schedule which claimed accountants' fees of £2,500 (25 hours at £100 per hour) and counsel's brief fee of £9,000 (approx 80 hours). Counsel had been instructed by the accountants. HMRC argued that the tribunal should not make a summary assessment of costs because of the deficiencies in the costs schedule but should order a detailed assessment under r. 10(8)(c) of the Tribunal Procedure (Upper Tribunal) Rules 2008. In the alternative, they contended that the amount claimed should be significantly reduced on the basis that accountant's fees were irrecoverable; a certain amount of time had been taken up by the taxpayer's application to amend to raise new public law arguments and on a distinct argument on control on which it had been unsuccessful; and the amount claimed was in any event excessive. The taxpayer responded with breakdown of the costs claimed and an explanation of how the fees had been calculated.
Held, ruling that HMRC should pay 80 per cent of the taxpayer's costs, summarily assesssed at £9,200:
1.The present case before the Upper Tribunal lasted for almost two days. For a tax appeal of that duration, using specialist counsel, a total bill of costs in the amount of £11,500 was relatively modest. It was understandable that the taxpayer did not feel it incumbent to produce a detailed schedule of costs, in the hope that its claim would not be questioned, subject to any matters of principle. Little would be achieved if the time and expense of preparing a detailed schedule of costs in support of a modest claim for costs should significantly add to the total of those costs. However, HMRC had questioned the figures and the taxpayer had produced a detailed breakdown. It would not be appropriate or proportionate to decline to make a summary assessment and to send the matter for detailed assessment.
2.The taxpayer's counsel had been instructed directly by its accountants; no solicitor was involved. The accountants were the representative of the taxpayer for the purpose of r. 11(1) of the Tribunal Procedure Rules and written notice of their appointment was duly sent to the Upper Tribunal pursuant to r. 11(2). However, it appeared that the accountant was not a "legal representative" as defined by r. 11(9). Since under r. 11 a party might appoint a representative who was not a legal representative, and given the breadth of the tribunal's discretion under s. 29(1) of the Tribunals, Courts and Enforcement Act 2007, the tribunal had power to order a party to pay the costs incurred by the other party in instructing that representative where that was appropriate.
3.There was nothing unlawful about the taxpayer's accountants acting as...
To continue reading
Request your trial