Hardev Singh v The Commissioners for HMRC [2026] UKFTT 46 (TC)

[2026] UKFTT 00046 (TC)Case No TC09748
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 12 August 2025Date Judgment date: 06 January 2026
Appeal reference: TC/2023/08761
COSTS – appellant’s application for unreasonable costs - late withdrawal by HMRC - whether HMRC acted unreasonably in defending proceedings - yes in small part – whether earlier “costs of and incidental to” appeal – in part – whether costs claimed reasonable and proportionate – no – application allowed in part
Before
TRIBUNAL JUDGE ANNE SCOTT
Between
HARDEV SINGHAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentMr Hanif Mohammed, friend and supporter of Mr Singh for AppellantMs Fiona Man, litigator of HM Revenue and Customs’ Solicitor’s Office for RespondentsDECISION

Introduction

[1]This was a hearing to determine the appellant’s application for costs (“the Application”) which was lodged with the Tribunal on 10 October 2024. The Application itself extended to four pages together with what the appellant described as an “appendix of exhibits” which amounted to 20 pages narrating 155 items which had been uploaded to HMRC’s Secure Data Exchange Service (“SDES”).[2]The appellant sought a summary assessment of those costs in terms of Rule 10 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (as amended) ("the Rules").[3]In the Application the appellant relied upon section 29(3) Tribunal Courts and Enforcement Act 2007 (“TCEA”) and on Rule 10(1)(b) of the Rules and Catanã v HMRC 2012 UKUT 172 (TCC) (“Catanã”)at paragraphs 38 and 44. (Unfortunately that decision extends to only 21 paragraphs.) He argued that costs should be awarded on the basis of HMRC’s unreasonable behaviour.[4]On 16 October 2024, HMRC wrote to the appellant, copied to the Tribunal, explaining the rules on costs and in particular the need for a Schedule of Costs (the “Schedule”). They furnished links to the relevant rules. Correspondence ensued.[5]On 29 November 2024, the Tribunal wrote to the appellant intimating that the Application should be resubmitted and accompanied by a Schedule and an explanation as to why it was late.[6]On 11 December 2024, the Application was resubmitted together with a Schedule. It had the same narrative as the 155 items in the “appendix of exhibits” plus a further five items. The appellant had added columns describing the type of “correspondence” as being a document, email or telephone call, the author, the number of hours involved and the total. The appellant claimed costs as a litigant in person at an hourly rate of £19 per hour for each of those items. That is the rate prescribed by Practice Direction 46.[7]He also claimed what was described as “an uplift on a discretionary basis” of 25% because of what he described as “the conduct of the respondent which as can be seen within the above detailed schedule was consistently bordering on frivolous and vexatious and/or unreasonable to a high degree”. He argued that “…the matter could have been withdrawn by the respondent far earlier than it was.”.[8]The total was £21,688.50. The first itemised entry of the 160 items was dated 19 February 2021, being the date that HMRC had opened an enquiry into the appellant’s tax affairs, and the last was dated 9 October 2024 being the day before the Application was lodged. The items are not numbered sequentially.[9]HMRC’s undated formal response, but filed with the Tribunal on 25 February 2025, accepted “liability for the reasonable and proportionate costs” of appeal TC/2023/08761. HMRC argued that the costs claimed by the appellant are unreasonable and disproportionate, and that many did not relate to costs of or incidental to the appeal. HMRC offered a total of £275.50 being 14 hours 30 minutes at £19 per hour.[10]In particular they had argued that there should be no award of costs prior to the date of lodgement of the appeal with the Tribunal on 28 June 2023.[11]The parties had not been directed to lodge Skeleton Arguments but on 6 August 2025, the appellant lodged a Skeleton Argument. HMRC responded on 8 August 2025 and on the day before the hearing, the appellant lodged with the Tribunal a “Supplemental Skeleton Argument” in response to HMRC’s Skeleton Argument. There was attached to it as Annex 2 a Schedule of “additional costs which have been incurred” comprising 76 items dated between 8 October 2024 and 12 August 2025 (the latter date being for three hours for this hearing). Only 43 of those items related to documents in the Bundle. That escalated the total costs claimed (including the uplift) to £23,096.88. Annex 1 was a detailed cross reference of the Schedule with the Bundle on the premise that if a document was in the Bundle and used in pleadings, evidence or submissions then it would be “of and incidental” to the proceedings.[12]Ms Man formally objected to the late lodging of the Schedule. I certainly understood that she had been ambushed since it, and the Skeleton Argument with the other Annex, had been served the day before the hearing. However, given that the appellant is a litigant in person and it had been obliquely presaged at paragraph 10(c) of the appellant’s first Skeleton Argument, I decided that it should be admitted.[13]With the consent of the parties, the hearing was conducted by video link using MS Teams. Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to join the hearing remotely in order to observe the proceedings. As such, the hearing was held in public.[14]The other documents to which I was referred comprised a Bundle consisting of 3,360 pages. The appellant had subsequently, and without consent, lodged an additional Bundle comprising seven pages but at the outset of the hearing Mr Mohammed confirmed that the appellant relied only upon the original Bundle.[15]The history of the appeal was a problem for both parties as there had been a previous appeal in relation to the same enquiry by HMRC (“the First Appeal”). A number of issues arise in that regard not least because the Application claims all the costs of the First Appeal and indeed for the HMRC enquiry preceding that but HMRC argued that, as a general principle, the only costs that could be awarded would be those relating to this appeal (“the Second Appeal”).The Second Appeal relates to assessments issued pursuant to section 29 Taxes Management Act 1970 (“TMA”) for the tax years 2013/14 to 2020/21 inclusive. and penalties for a failure to notify liability to tax raised under Schedule 44 Finance Act 2008 for the tax years 2013/14 to 2019/20 inclusive.

Preliminary Issues

[16]Mr Mohammed confirmed that, since the Supplemental Skeleton Argument filed the previous day relied upon the Court of Appeal in Distinctive Care Limited V HMRC [2019] EWCA Civ 1010 (“Distinctive CA”), the appellant no longer relied upon Catanã.[17]At the outset of the hearing, Ms Man very fairly indicated that HMRC had reviewed their files. Their revised position (cf paragraph 10 above) was that, in the event that for any reason the Tribunal was minded to make an award of costs which encompassed 2022 (ie before the lodgement of the Second Appeal on 28 June 2023), HMRC would be prepared to give the benefit of the doubt to the appellant in that the appellant may have been confused by:(a) the reference to an independent review in a letter dated 7 July 2022 (“the July 2022 Letter”), and(b) a letter from HMRC dated 16 December 2022 which referred to the July 2022 Letter as being a decision letter.[18]The context is that the appellant has always argued, and throughout the hearing Mr Mohammed argued, that a letter from HMRC dated 31 March 2022 (“the March 2022 Letter”), which was a tax calculation for the tax years ended 5 April 2014 to 5 April 2021, was, like the July 2022 Letter, an appealable decision. Mr Mohammed argued that both letters, which were very similar, were really the same decision.[19]The March 2022 Letter had been the subject matter of the First Appeal.[20]I explained that the March 2022 Letter was simply a tax calculation as was the July 2022 Letter. Certainly, there was a heading in the former letter saying “Our Decision” but it went on to say under a heading “What you need to do now” that “You should phone us ….to tell us if you agree with our decision”.[21]On 3 May 2022, HMRC wrote to the appellant, referring to a letter from him dated 8 April 2022, pointing out that:
“We have not yet raised any assessments on your Self-Assessment account and the compliance check is still open. Please write to us directly outlining your concerns and provide any additional evidence that you may have and hopefully we can come to an agreement over any taxes that are now due. Once we have raised our assessments, and you receive a letter detailing how much we believe you need to pay, you will still retain the right to appeal against a decision, ask for a review by our solicitor’s team or take the matter to tribunal.”
[22]That letter of 8 April 2022 simply said that the appellant disagreed with the March 2022 Letter and said that “I will seek a review...”. He asked for the name and address to which he should write.[23]In response to further correspondence, HMRC wrote the July 2022 Letter to the appellant enclosing further revised calculations. Under a heading “Independent Review” it read:
“Please read our factsheet HMRC…regarding disagreeing with HMRC’s decisions. An appeal or independent review can be submitted or requested, but not until there has been an appealable decision made. An appealable decision for this check is made when the assessments have been raised. If you do not agree to these calculations, we will proceed with our own assessments to progress the case.”
[24]Amongst other factsheets that were enclosed was the “HMRC1 HM Revenue and Customs (HMRC) decisions - what you can do if you disagree”.[25]Under a heading “Tell us now if you disagree” it reads: “When we make a decision which you can appeal against, we’ll write and tell you. We’ll also explain how we arrived at the decision and tell you about your rights of appeal”.[26]In the letter to the appellant dated 3 May 2022, HMRC clearly explained that the March 2022 Letter was not an appealable decision and also explained what would be appealable.[27]Neither the March 2022 Letter nor the July 2022 Letter said that it was an appealable decision and neither explained rights of appeal etc.[28]I explained to Mr Mohammed and Mr Singh that those letters, whether read together or separately, made it clear that neither had been an appealable decision.[29]I also explained that, in any event, the Tribunal is a creature of statute and has only the powers given to it by statute. Not all of HMRC’s decisions carry rights of appeal to the Tribunal. Neither the March 2022 Letter nor the July 2022 Letter was a decision that was appealable to the Tribunal although both were undoubtedly HMRC decisions.[30]Although, ultimately, in the face of a strike out application, the appellant had withdrawn the First Appeal, I explained that, in terms of Rule 8(2)(a) of the Rules which reads:
“(2) The Tribunal must strike out the whole or a part of the proceedings if the Tribunal— (a) does not have jurisdiction in relation to the proceedings or that part of them;”. (a) does not have jurisdiction in relation to the proceedings or that part of them;”
.

Background leading to the Application

[31]The Second Appeal was a late appeal to which HMRC took no objection, albeit they requested an extension of time to review all of the facts from the First Appeal which had been withdrawn by the appellant on 24 February 2023.[32]There was extensive correspondence between the appellant and HMRC and sometimes the Tribunal. I have not narrated every detail but have set out a broad overview.

The First Appeal and the concurrent progress of the enquiry

[33]On 26 April 2022, the appellant lodged with the Tribunal the First Appeal which enclosed a copy of the appellant’s Grounds of Appeal dated 26 April 2022 which had been addressed to HMRC. In the letter of 26 April 2022, the appellant had written to HMRC asking for a review having already done so on 8 April 2022. He set out the background to the enquiry, referred to the March 2022 Letter as being “The Final Determination of The HMRC Campaigns Team” and questioned the £100 of allowable expenses referred to therein. He argued that the “decision maker” had failed to give adequate reasons for his decision and said that he would appeal to the Tribunal if the reviewer did not allow the expenses that he had claimed and did not provide reasons.[34]As I have indicated at paragraph 21 above, on 3 May 2022, HMRC wrote to the appellant, referring to the letter from him dated 8 April 2022. HMRC made it clear that there was no appealable decision and thus no scope for a review.[35]On 13 May 2022, the appellant wrote a one page letter to HMRC referring to their letters of 29 April and 3 May 2022 complaining about what he perceived as their lack of appropriate response, and asked for a reply whether by way of review or via his appeal to the Tribunal.[36]In response to further correspondence and a telephone call from the appellant, HMRC wrote to him again on 27 May 2022 reiterating that the March 2022 Letter was a calculation and he could not yet ask for a review or appeal. He was asked to reply by 10 June 2022 with an explanation as to why he disagreed with the calculations, and he did so.[37]On 27 May 2022, HMRC wrote to the appellant referring to his letters of 8 and 26 April and 13 May 2022 pointing out that their investigation had not been concluded and, in summary, that there was then no right to appeal.[38]On 30 June 2022, the appellant wrote a one page letter to HMRC asking for a date when their investigations would be concluded.[39]On 7 July 2022, ie the July 2022 Letter, HMRC wrote to the appellant referring to his letter of 8 May 2022 which said that he did not agree with HMRC and referred to previous correspondence.[40]On 12 August 2022, HMRC sent an application to the Tribunal seeking strike out of the appeal because HMRC had not yet issued an appealable decision in relation to the enquiry which had been opened by HMRC on 19 February 2021; the appeal was therefore invalid.[41]On 29 August 2022, the appellant replied, objecting to the strike out application arguing that the March 2022 Letter was an HMRC decision, there was no other ongoing investigation, the appeal should proceed which failing the strike out application should be listed for hearing.[42]On 14 September 2022, the appellant lodged what he described as his Second Response to the strike out application arguing that the application was frivolous and vexatious, furnishing further information and requesting a hearing on the strike out application.[43]Both responses included copies of previous correspondence.[44]On 5 October 2022, the Tribunal sought dates to avoid for a video hearing.[45]On 23 November 2022, the appellant wrote to HMRC, copied to the Tribunal, again arguing that the March 2022 Letter was an appealable decision but that if HMRC did not respond to him in the manner required by him he: “would have no alternative to make (sic) formal application to the tax tribunal seeking an order from the tribunal that HMRC provide a closure notice to the investigation being conducted…”.[46]On 24 November 2022, the Tribunal listed the hearing for 27 February 2023.[47]On 25 November 2022, HMRC intimated that Closure Notices and Assessments would be issued within 30 days.[48]On 16 December 2022, HMRC wrote to the appellant, referred to previous correspondence and stated “We confirm that our letter dated 14 November 2022 [a penalty explanation letter]…refers to our decision letter dated 7 July 2022…”.[49]On 2 January 2023, in a two page letter, the appellant emailed the Tribunal and HMRC providing information about his tax affairs and enclosed the July 2022 Letter and the first page of the letter of 16 December 2022.[50]On 5 January 2023, the appealable decisions, being the assessments and penalties (which were the subject matter of the Second Appeal), were issued.[51]On 20 January 2023, HMRC issued their View of the Matter letter (on the basis that the letter of 2 January 2023 was an appeal). That letter concluded by pointing out that if the appellant disagreed with the conclusions, then he could accept the offer of a review or appeal to the Tribunal within 30 days.[52]On 24 February 2023, the appellant emailed the Tribunal and HMRC referring to that letter with a detailed argument pointing out that a particular issue needed to be resolved or it would have to be “litigated at the tax tribunal”. In support of his position, he enclosed five one page witness statements, three of which were dated 8 February 2023 and the others 19 and 22 February 2023.[53]He concluded by requesting that the hearing in the First Appeal be cancelled, of consent, and stated that if the matter was not settled on review he would appeal to the Tribunal. Following two telephone calls, HMRC emailed the Tribunal on the same day, confirming that the appellant had now been issued with assessments and penalties and had made a valid appeal to HMRC. Therefore, subject to Alternative Dispute Resolution (“ADR”) and/or a statutory review, the appellant was at liberty to make a valid appeal to the Tribunal. HMRC enclosed copies of the assessments and penalties. The Tribunal cancelled the hearing that day.[54]On 27 February 2023, referring to his email of 24 February 2023, he wrote to HMRC enclosing a signed copy of one of the witness statements. He requested that all of that information be given to the review officer.[55]On 13 April 2023, the Tribunal wrote to the appellant to confirm that the hearing was cancelled and asked him to confirm that he was withdrawing his appeal as he had now received appealable decisions from HMRC.[56]On 2 June 2023, the Tribunal advised the appellant that if no response was received to their letter of 13 April 2023 within 28 days, the Tribunal file would be closed.[57]There was no response and the Tribunal file was closed.

Between the two appeals

[58]On 31 March 2023, the appellant wrote to the review officer again relying on the witness statements and enclosing updated details of the expenditure claimed as deductions.[59]The Review Conclusion letter was dated 30 May 2023 and amongst other matters stated that:(a) the issue was “whether the expenses incurred for work on the properties at 14 Ribbleton Avenue and 11 Rydal Road constitute revenue expenditure or capital expenditure”.(b) The appellant had not submitted self-assessment tax returns (“SATRs”) in respect of two properties and so had declared no rental income or expenses before the start of the compliance check.(c) He had received rental income from Rydal Road in each of the years 2013/14 to 2020/21 and had produced the rental agreements to HMRC.(d) He had then claimed itemised expenses being £87,841.19 (of which £35,000 was an estimate of future expenditure) for Ribbleton Avenue and £4,406.77 for Rydal Road, arguing that that produced net losses.(e) After the review had started, on 31 March 2023, he had claimed itemised further “actual incurred property costs” of £54,833.09 and £10,604.24 respectively. That had surprised both the review officer and the original officer given the detail that had previously been furnished; it was a challenge.(f) The £10,604.24 was noted by HMRC to have included the £4, 406.77 which had already been allowed.(g) In a letter received by HMRC on 8 June 2021, in a “Statement of Truth” the appellant had described Ribbleton Avenue as being “derelict” (paragraph 10 in the statement). The five one page witness statements produced by the appellant all stated that it had not been derelict. In those circumstances, because of the conflict, the officer attached no weight to either the appellant’s statement or the witness statement.(h) The assessments and penalties were upheld.

The Second Appeal

[60]On 28 June 2023, the appellant lodged this appeal with the Tribunal. The Grounds of Appeal were that HMRC had been provided with all relevant information for the deductions claimed and had failed to give reasons why that had not been allowed; there should have been no discovery assessments.[61]Mr Mohammed argued that the Second Appeal related to both the March and July 2022 Letters. However, the Notice of Appeal stated that the appellant had a Review Conclusion letter.[62]On 13 July 2023, the Tribunal wrote to the appellant pointing out that the Review Conclusion letter was dated 20 January 2023 and therefore the appeal was late (there had been a number of documents attached to the Notice of Appeal and it is not clear from the Bundle what was included). They asked for an explanation within 14 days. The appellant replied on 26 July 2020 explaining that the Review Conclusion letter was in fact dated 30 May 2023.[63]On 24 July 2023, HMRC wrote to the appellant noting that no reply had been received in relation to the Review Conclusion letter and that the matter was considered settled in terms of section 54(1) TMA.[64]In July 2023, HMRC issued late payment penalties.[65]On 3 August 2023, the appellant wrote to HMRC and HMCTS arguing that his appeal dated 28 June was not out of time. He also argued that he had had a telephone call with the Tribunal administration on 26 June 2023, when he had said that HMRC had behaved unscrupulously. He stated that the Tribunal administration had said that the First and Second Appeals would be “connected”.[66]The late appeal issue appears to have been resolved but I have no details and on 18 August 2023 HMRC wrote to the appellant confirming the identity of the litigator, Mr McCabe.[67]On 23 August 2023, HMRC wrote to the appellant apologising for the letter of 24 July 2023 pointing out that it was only on 18 August 2023 that they had been made aware of the appeal; the assessments and penalties were “stood over”.[68]On 4 September 2023, Mr McCabe wrote to the appellant stating that the letter of 3 August 2023 was addressed to a colleague and may not have been dealt with as she was on maternity leave. He asked the appellant for a contact telephone number and enquired whether or not he had made an application for ADR. On 6 September 2023, the appellant replied giving his telephone number, and that of Mr Mohammed, and confirmed that ADR had not yet been pursued but was being considered.[69]On 27 September 2023, HMRC wrote to the appellant referring to his letter of 3 August 2023 and narrated the history of the First Appeal. It was confirmed that the Second Appeal was a valid live appeal and that the Tribunal had closed its file in relation to the First Appeal. HMRC’s Complaints Procedure was explained since it was not clear if the letter of 3 August 2023 was a formal complaint.[70]On 6 October 2023, Mr McCabe wrote to the appellant referring to previous telephone discussions with him and Mr Mohammed and asking about whether Mr Mohammed was authorised to act in this matter, whether ADR was being pursued and seeking clarification about what the appellant had called the “unequivocal evidence provided to HMRC” during the review stage. He confirmed that he was seeking an extension of time to provide the Statement of Case until 9 November 2023 as he required to obtain “technical advice” and review all of the facts from the First Appeal. On the same day the extension of time request was lodged with the Tribunal.[71]On 26 October 2023, having had no response, the officer reiterated his queries and confirmed that he would be meeting the deadline of 9 November 2023.[72]The appellant replied on the same date asking for “an eta” for a letter from the original HMRC officer and a potential referral for ADR. He stated that he did not want “this to drag on further”. He also emailed the Tribunal asking for an update on the extension of time request.[73]On 8 November 2023, HMRC sought a further extension of time to 9 December 2023 on the basis that HMRC were “awaiting feedback from both their Technical and Policy teams relating to various aspects of this Appeal”.[74]On 24 November 2023, the appellant emailed the Tribunal asking about the status of that application as he wished to know whether or not a hearing date would be likely to be fixed before 10 December 2023 because the Statement of Case was required by that date.[75]On 8 December 2023, HMRC sought a further extension of time until 18 January 2024 on the basis that:
“The reason for this extension of time request is due to the Respondents still awaiting technical feedback in relation to various aspects of the appeal. This particular appeal requires both Policy and Technical feedback due to the various complexities that require the appropriate observation and input. Whilst the Respondents are in receipt of the Policy input, we still require the relevant feedback from our Technical team. The Respondents respectfully submit that the advice by both teams is essential to ensure all submissions are appropriately raised before the Tribunal within the Statement of Case.”
[76]Unfortunately, the Tribunal did not respond to the applications or to the appellant’semail.On 12 January 2024, having been telephoned by the appellant, the Tribunal wrote to the parties on Judge Bailey’s instructions noting that on 2 January 2024, the appellant had objected to the further application for an extension of time and had sought a barring order.[77]In particular, the letter stated that: “I agree with the Appellant that a considerable time seems to have passed without any apparent progress by HMRC. I agree that it is not immediately obvious why this appeal, which seems to turn on its facts, should require the input of technical specialists. It is also not clear how it was possible for HMRC to issue a review decision on 30 May 2023, if technical advice is required. … If technical advice was so fundamental to this matter that HMRC could not proceed without it, then that advice should have been sought prior to issuing a review decision so as to avoid unnecessary delay in Tribunal proceedings”.[78]Judge Bailey extended the time for lodging the Statement of Case until 22 January 2024 but declined to issue a barring order on the basis that HMRC had not shown a lack of cooperation with the Tribunal. An extension of time had been sought promptly on each occasion and, until 2 January 2024, the appellant had not opposed those applications. If the Tribunal had dealt promptly with the applications, they would inevitably have been granted.[79]The Statement of Case was filed on 18 January 2024.[80]On 28 February 2024, the appellant emailed the Tribunal seeking an extension of time to 26 April 2024 to serve a response.[81]On 10 May 2024, the Tribunal wrote to the appellant confirming that he was not required to present a response. If he wished to set out an analysis of the items which he had claimed as allowable expenses he could choose to do that in his witness statement or in his Skeleton Argument. The Tribunal also issued Directions.[82]On 20 June 2024, the appellant filed a list of 119 documents and HMRC responded that day pointing out that there had not been compliance with the Directions in that copies of certain documents had not been included. Furthermore, the appellant had included evidence of “PDF telephone conversations and mp3 audio” which were not known to HMRC. In terms of Rule 15 of the Rules, the officer requested that the appellant provide that evidence and that the Tribunal acknowledged that request. He indicated that if that was not forthcoming HMRC would seek further Directions from the Tribunal.[83]On 2 July 2024, the appellant responded sending a USB drive to both HMRC and the Tribunal. Although on holiday, Mr McCabe responded that day explaining that because of cyber security SDES would have to be used.[84]The documentation was uploaded on 17 July 2024.[85]On 18 July 2024, in compliance with Directions, the appellant filed his witness statements with the Tribunal and HMRC.[86]On 19 July 2024, HMRC filed Officer Skinley’s witness statement and on receipt of that, the appellant immediately questioned the officer’s qualifications.[87]Mr McCabe replied and again asked about the recordings. Correspondence ensued in the course of which the appellant questioned Mr McCabe’s annual leave arrangements. Unsurprisingly, Mr McCabe refused to disclose his arrangements for leave.[88]After further correspondence, Mr McCabe emailed the Tribunal on 13 August 2024, with an urgent request that the Directions be suspended in relation to submission of the Bundles, which was HMRC’s responsibility, because of the covert mp3 recordings and the PDF transcripts of telephone calls with both HMRC and the Tribunal.[89]The appellant responded the following day stating that he would not now rely on those.[90]On 14 August 2024, Mr McCabe emailed the Tribunal with an updated request for amended Directions seeking a formal exclusion of the mp3 audio and the transcripts, citing potential GDPR issues given that the recordings were all conversations both with HMRC and Tribunal staff. He argued that the appellant’s actions in regard to those had caused both confusion and delay in the proceedings. The appellant’s request that the Bundle be reformatted by 16 August 2024 was unreasonable and an extension of time was sought.[91]The appellant replied on 15 August 2024 with a formal submission with numerous enclosures dated the previous day confirming that he would not rely on the covert recordings and objecting to the extension of time.[92]On 19 August 2024, the appellant sent a three sentence email to the Tribunal asking whether HMRC would be granted an extension of time.[93]On 30 August 2024, the appellant sent a one page email to Mr McCabe asking about the Bundle.[94]On 3 September 2024, Mr McCabe emailed the Tribunal confirming that HMRC would not be defending the appeal.[95]The following day, in a two sentence email the appellant asked the Tribunal for clarification as to which category the appeal had been allocated stating that from his records, he could not identify the category. I observe that the letter of 11 August 2023 had confirmed that the appeal was in the standard category.[96]On 8 October 2024, HMRC wrote to the appellant confirming that following withdrawal from the Tribunal, the assessments, interest and penalties had been removed and the case closed.[97]As I have explained in the Introduction, the Application was lodged on 10 October 2024 and correspondence ensued.[98]On 8 January 2025, HMRC wrote to the appellant stating that HMRC agreed to pay “the reasonable costs in relation to the litigation of the appeal”. However, it was pointed out that pre-litigation conduct is not relevant and since the Notice of Appeal was dated 28 June 2023 costs before that date would not qualify. The appellant was asked to explain why some of the tasks appeared to have taken so long.[99]On 10 January 2025, HMRC wrote a detailed “without prejudice “letter objecting to the costs offering a total of £380 being 20 hours at £19 per hour. They pointed out that the claimed enhancement of 25% had no basis in law. They enclosed a copy of Distinctive CA and Bhargava v HMRC [2024] UKFT 66 (TCC).[100]The appellant replied on 12 January 2025 and wrote again on 17 January 2025 complaining that he had not had a reply to the email of 12 January and stating:
“Be that as it may, given the level of unreasonable conduct that has been waged against myself since Feb 2021, I was hoping that your involvement would be different and lead to an allevitation of the stress that I have been put under”
. He rejected the offer of £380 and asked that the matter proceed to a hearing urgently.[101]HMRC replied on 17 January 2025, pointing out that the appellant should not have disclosed a “without prejudice” offer to the Tribunal, explaining HMRC’s right to make detailed submissions and pointing out that HMRC had issues with the overall time claimed.[102]On 21 January 2025, the appellant wrote a detailed letter explaining why he would not accept the offer and he offered to settle for “no less than £20k in full and final settlement …”.[103]On 27 January 2025, he chased HMRC stating that if he did not get a response by 29 January 2025, he would ask for the case to be listed on an expedited basis.[104]HMRC replied on 30 January 2025, stating that there were no Tribunal Directions in relation to a response to the Application, but they would provide a response on the basis that the Application was unreasonable and disproportionate.[105]They did lodge their response on 25 February 2025 (see paragraph 9 above) and correspondence again ensued.[106]In May 2025, in summary, there was correspondence where the appellant alleged that the Bundle filed by HMRC in accordance with the Tribunal Directions was incomplete. Ultimately Judge Bailey issued Directions. The appellant did not reply timeously. However, he did confirm that the Bundle was indeed complete.

The Legal Framework and thus my approach to the Application

[107]For a litigant in person The Litigants in Person (Costs and Expenses) Act 1975 applies to the Tribunal by virtue of the Tribunal Courts and Enforcement Act 2007 section 48(1) and (2) and Schedule 8 paragraph 6(1) and (2).[108]The impact of that is that a litigant in person may claim costs in one of two ways, namely, an hourly rate to reflect actual financial loss or where unable or unwilling to establish actual loss, on a fixed hourly charge. The current hourly charge is £19 per hour. There is a ceiling for the maximum a litigant in person can recover for time which is two-thirds of the amount that would have been allowed if legally represented. The appellant represented himself.[109]A party would only be awarded costs which are reasonably incurred and reasonable in amount. In this sense the costs should be proportionate which is to say that the work was necessary and the time taken to undertake the work was reasonable. The level of costs must be proportionate to the circumstances of the case.[110]In appeals to this Tribunal (other than those that are allocated to the Complex category of cases, and, although the appellant initially thought that this was a Complex case, this case has always been allocated to the Standard category) there is – unlike in court proceedings – no general costs shifting regime, or practice that “the loser pays” (see paragraph 12 of Catanã). Instead, as I indicated during the hearing, the position is as described by the Upper Tribunal in Tarafdar v HMRC [2014] UKUT 362 (“Tarafdar”) at paragraphs 17 to 20.[111]Those paragraphs read: “17. Section 29 of the Tribunals, Courts and Enforcement Act 2007 provides that all costs of and incidental to proceedings in the FTT shall be in the tribunal’s discretion, subject to Tribunal Procedure Rules. So far as relevant, rule 10 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 provides as follows: (1) The Tribunal may only make an order in respect of costs... (a) under section 29(4) of the 2007 Act (wasted costs); (b) if the Tribunal considers that a party or their representative has acted unreasonably in bringing, defending or conducting the proceedings; (c) if [the proceedings have been allocated as a Complex case] ...18. It was common ground that, as this appeal was not categorised as Complex, and there is no application for “wasted costs” as defined by the 2007 Act, the only basis upon which an application could be made in this case is in respect of unreasonable conduct. The scope of that criterion has been discussed in this Tribunal in Catanã v Revenue and Customs Commissioners [2012] UKUT 172 (TCC), where Judge Bishopp, at [14], described it as covering: ‘cases in which an appellant has unreasonably brought an appeal which he should know could not succeed, a respondent has unreasonably resisted an obviously meritorious appeal, or either party has acted unreasonably in the course of proceedings, for example by persistently failing to comply with the rules and directions to the prejudice of the other side.’19. The costs ‘of and incidental to the proceedings’ cover only those costs incurred in the course of preparing and pursuing the appeal (Catanã, at [7], as explained in Stomgrove v Revenue and Customs Commissioners (PTA/480/2014), at [11]), and, on an application by an appellant, it is only the reasonableness of HMRC’s conduct in defending or conducting the proceedings that falls to be considered. The reasonableness of the original decision against which the appeal has been made is not directly in point, but is relevant to the question whether it was reasonable of HMRC to defend, or to continue to defend, the appeal.20. Even if the tribunal is satisfied that a party has acted unreasonably in the terms of rule 10, the tribunal nevertheless has a discretion whether or not to make a costs order, or as regards the extent of a costs order. Such a discretion, like any other discretion conferred on the tribunal, must be exercised judicially.” (1) The Tribunal may only make an order in respect of costs... (a) under section 29(4) of the 2007 Act (wasted costs); (b) if the Tribunal considers that a party or their representative has acted unreasonably in bringing, defending or conducting the proceedings; (c) if [the proceedings have been allocated as a Complex case] ... ‘cases in which an appellant has unreasonably brought an appeal which he should know could not succeed, a respondent has unreasonably resisted an obviously meritorious appeal, or either party has acted unreasonably in the course of proceedings, for example by persistently failing to comply with the rules and directions to the prejudice of the other side.’[112]The approach in Tarafdar has been confirmed and amplified by the Court of Appeal in Distinctive CA upon which the appellant relies in his Supplemental Skeleton Argument. I have underlined the sentence in paragraph 25 to which he referred. However, he has quoted only part of paragraph 25 and none of paragraphs 29 to 31 but they are very relevant.[113]I have added emphasis where the Court of Appeal’s dicta impact on the Application not least because(a) the appellant has claimed costs for almost all, if not all, of his interactions with HMRC or the Tribunal (and on occasion the Local Authority) from the date that HMRC opened the enquiry; and(b) there is some support for part of his arguments.[114]Those paragraphs read: “25. Drawing those tribunal decisions together, in my judgment the passage from Catanã and the questions posed by the UT (IAC) in Cancino show the correct approach to the application of rule 10(1)(b). I would sound a note of caution about the proviso discussed in Bulkliner and Marshall & Co that pre-commencement conduct may be relevant if there is bad faith. That should not be read as suggesting that there is some exception to the general principle such that if an assessment or penalty is issued in bad faith by HMRC, that can in some way bring conduct before the start of the appeal within the scope of rule 10(1)(b). There may be circumstances in which behaviour before the appeal is brought is relevant to the tribunal’s assessment of the reasonableness of conduct post-commencement but an applicant cannot extend the scope of the tribunal’s inquiry by alleging bad faith at an earlier stage on the part of HMRC. The parties and the tribunal must always bear in mind first that the focus should be on the standard of handling the case rather than the quality of the original decision: see Maryan (t/a Hazeldene Catering) v HMRC [2012] UKFTT 215 (TC) and secondly, that the jurisdiction to award costs is intended to be exercised in a straightforward and summary way and should not trigger a wide-ranging analysis of HMRC’s conduct relating to the applicant’s tax affairs. … 29. The reasonableness or otherwise of the failure by HMRC to withdraw an appealable decision once they are notified of the appeal to the FTT has been addressed by the Upper Tribunal in a number of cases. In Tarafdar the taxpayer appealed against a refusal of an application for costs against HMRC. He argued that the flaw in HMRC’s tax assessment had been pointed out to HMRC at an early stage but HMRC had continued to defend a hopeless action until they decided following the commencement of FTT proceedings not to defend the appeal. The UT stated at [34]: ‘a tribunal faced with an application for costs on the basis of unreasonable conduct where a party has withdrawn from the appeal should pose itself the following questions:(1) What was the reason for the withdrawal of that party from the appeal?(2) Having regard to that reason, could that party have withdrawn at an earlier stage in the proceedings?(3) Was it unreasonable for that party not to have withdrawn at an earlier stage?’ 30. The UT also stated at [33] of Tarafdar that the proper enquiry is ‘whether HMRC had unreasonably prolonged matters once they were in the tribunal, or whether they should have withdrawn the assessment at an earlier stage’. In MORI the UT described MORI’s case as asserting that the information and explanations available to competent, trained HMRC officers at various stages of the proceedings prior to the hearing at which HMRC abandoned its defence had been sufficient to enable the officers acting reasonably to conclude that the claim ought not to be defended further: see [43]. The UT approved the statement of the FTT in that case that a failure to undertake a rigorous review of assessments at the time of making the appeal to the tribunal can amount to unreasonable conduct. The authority cited for that was Southwest Communications Group Ltd v HMRC [2012] UKFTT 701 (TC), [2013] SWTI 390. In that case the FTT (Judge Raghavan) rejected the suggestion that HMRC’s failure to settle the case at the internal review stage prior to the FTT appeal being lodged could amount to HMRC unreasonably defending or conducting proceedings. Judge Raghavan said that the earliest acts he could consider, whether these were framed as HMRC continuing to defend the appeal or as an omission in not settling the case sooner, were those arising after the appeal was notified. Judge Raghavan went on at [45], however, to reject HMRC’s contention: ‘ … that it was not until the witness statements drew together matters which it said had been presented in a “piecemeal” fashion that HMRC was in a position to settle. While it is no doubt a welcome bonus for HMRC if the evidence the appellant chooses to rely on … draws matters together in a comprehensive and well structured way for HMRC to consider, that is not the function of witness statements. Rather it is to be assumed that HMRC will once proceedings are started review all the relevant material that has been put before it, something which it will need to do in any event to finalise a Statement of Case and List of Documents, and will make an ongoing assessment of whether a case should continue to be defended.’ 31. I agree with that statement although I take the reference there to ‘once proceedings are started’ as meaning once HMRC has been notified of proceedings. It would be inconsistent with the structure of the FTT Rules to treat the conduct of the respondent prior to being notified of the appeal as conduct ‘in the proceedings’ for the purposes of rule 10(1)(b). The FTT Rules do not require the appellant to serve the notice on the respondent and in the present case DCL did not do so. It is the tribunal itself that gives notice of the proceedings to the respondent under rule 20(5). At that point HMRC must consider their position in relation to the case in order either to notify the appellant of any new grounds under rule 24(4) or to deliver the statement of case to the tribunal and the appellant within the 60 days allowed by rule 25(1)(c). HMRC must act promptly, once notified, if it becomes clear that the appeal cannot properly be defended.”. ‘a tribunal faced with an application for costs on the basis of unreasonable conduct where a party has withdrawn from the appeal should pose itself the following questions: (1) What was the reason for the withdrawal of that party from the appeal? (2) Having regard to that reason, could that party have withdrawn at an earlier stage in the proceedings? (3) Was it unreasonable for that party not to have withdrawn at an earlier stage?’ ‘ … that it was not until the witness statements drew together matters which it said had been presented in a “piecemeal” fashion that HMRC was in a position to settle. While it is no doubt a welcome bonus for HMRC if the evidence the appellant chooses to rely on … draws matters together in a comprehensive and well structured way for HMRC to consider, that is not the function of witness statements. Rather it is to be assumed that HMRC will once proceedings are started review all the relevant material that has been put before it, something which it will need to do in any event to finalise a Statement of Case and List of Documents, and will make an ongoing assessment of whether a case should continue to be defended.’[115]In his Supplemental Skeleton Argument, explaining why he had produced his Annex 1 (see paragraph 11 above), the appellant relied upon Judge Redston at paragraph 84 in Bhargava v HMRC [2024] UKFTT 66 (“Bhargava”) for the proposition that the costs applicant must explain why earlier costs (ie incurred before the appeal was lodged) are of and incidental to the proceedings. He is correct.[116]However, it is the earlier paragraph that is more important and paragraph 83 reads:
“83. TCEA, s 29 provides that the Tribunal only has the jurisdiction to award costs “of and incidental to” the “proceedings”
. Until the Court of Appeal decision in Distinctive Care v HMRC [2019] EWCA Civ 1010, it was generally considered that only costs arising after the appeal was made to the Tribunal could be claimed. However, in that case the Court of Appeal said at [39] that:
“It is the nature of the work done and the scope of the ultimate appeal that determine whether those costs are incidental to the appeal, not the subjective intention of the party when incurring the costs. For example, materials gathered or produced for the purpose of the internal review may then be recycled in the appeal before the FTT. Those costs are clearly of and incidental to the appeal even though they were largely incurred at the earlier stage.” (Emphasis added on the same basis as previously.)
“It is the nature of the work done and the scope of the ultimate appeal that determine whether those costs are incidental to the appeal, not the subjective intention of the party when incurring the costs. For example, materials gathered or produced for the purpose of the internal review may then be recycled in the appeal before the FTT. Those costs are clearly of and incidental to the appeal even though they were largely incurred at the earlier stage.” (Emphasis added on the same basis as previously.)[117]In judging whether a parties’ conduct is unreasonable, in Distinctive, in the Upper Tribunal [2018] UKUT 0155 (TCC) (“Distinctive UT”), Judges Sinfield and Poole stated that:
“How is conduct to be assessed? 44. In Market & Opinion Research International Limited v HMRC [2015] UKUT 0012 (TCC) (“MORI”) at [22] and [23], the Upper Tribunal endorsed the approach set out by the FTT in that case to the question of whether a party had acted unreasonably. That approach could be summarised as follows: (1) the threshold implied by the words “acted unreasonably” is lower than the threshold of acting “wholly unreasonably” which had previously applied in relation to proceedings before the Special Commissioners; (2) it is possible for a single piece of conduct to amount to acting unreasonably; (3) actions include omissions; (4) a failure to undertake a rigorous review of the subject matter of the appeal when proceedings are commenced can amount to unreasonable conduct; (5) there is no single way of acting reasonably, there may well be a range of reasonable conduct; (6) the focus should be on the standard of handling the case (which we understand to refer to the proceedings before the FTT rather than to the wider dispute between the parties) rather than the quality of the original decision; (7) the fact that an argument fails before the FTT does not necessarily mean that the party running that argument was acting unreasonably in doing so; to reach that threshold, the party must generally persist in an argument in the face of an unbeatable argument to the contrary; and (8) the power to award costs under Rule 10 should not become a ‘backdoor method of costs shifting’. 45. We would wish to add one small gloss to the above summary, namely that (as suggested by the FTT in Invicta Foods Limited v HMRC [2014] UKFTT 456 (TC) at [13]), questions of reasonableness should be assessed by reference to the facts and circumstances at the time or times of the acts (or omissions) in question, and not with the benefit of hindsight. (Emphasis added on the same basis as previously.) 46. In assessing whether a party has acted unreasonably, this Tribunal in MORI went on to say this (at [49]): ‘It would not, we think, be helpful for us to attempt to provide a compendious test of reasonableness for this purpose. The application of an objective test of that nature is familiar to tribunals, particularly in the Tax Chamber. It involves a value judgment which will depend upon the particular facts and circumstances of each case. It requires the tribunal to consider what a reasonable person in the position of the party concerned would reasonably have done, or not done. That is an imprecise standard, but it is the standard set by the statutory framework under which the tribunal operates. It would not be right for this Tribunal to seek to apply any more precise test or to attempt to provide a judicial gloss on the plain words of the FTT rules.’” (1) the threshold implied by the words “acted unreasonably” is lower than the threshold of acting “wholly unreasonably” which had previously applied in relation to proceedings before the Special Commissioners; (2) it is possible for a single piece of conduct to amount to acting unreasonably; (3) actions include omissions; (4) a failure to undertake a rigorous review of the subject matter of the appeal when proceedings are commenced can amount to unreasonable conduct; (5) there is no single way of acting reasonably, there may well be a range of reasonable conduct; (6) the focus should be on the standard of handling the case (which we understand to refer to the proceedings before the FTT rather than to the wider dispute between the parties) rather than the quality of the original decision; (7) the fact that an argument fails before the FTT does not necessarily mean that the party running that argument was acting unreasonably in doing so; to reach that threshold, the party must generally persist in an argument in the face of an unbeatable argument to the contrary; and (8) the power to award costs under Rule 10 should not become a ‘backdoor method of costs shifting’. 45. We would wish to add one small gloss to the above summary, namely that (as suggested by the FTT in Invicta Foods Limited v HMRC [2014] UKFTT 456 (TC) at [13]), questions of reasonableness should be assessed by reference to the facts and circumstances at the time or times of the acts (or omissions) in question, and not with the benefit of hindsight. (Emphasis added on the same basis as previously.) 46. In assessing whether a party has acted unreasonably, this Tribunal in MORI went on to say this (at [49]): ‘It would not, we think, be helpful for us to attempt to provide a compendious test of reasonableness for this purpose. The application of an objective test of that nature is familiar to tribunals, particularly in the Tax Chamber. It involves a value judgment which will depend upon the particular facts and circumstances of each case. It requires the tribunal to consider what a reasonable person in the position of the party concerned would reasonably have done, or not done. That is an imprecise standard, but it is the standard set by the statutory framework under which the tribunal operates. It would not be right for this Tribunal to seek to apply any more precise test or to attempt to provide a judicial gloss on the plain words of the FTT rules.’”
[118]Having established any instances of unreasonable behaviour by a party, it is then necessary to identify the costs attributable to such behaviour. In the Court of Appeal in McPherson v BNP Paribas (London Branch) [2004] ICR 1398 Mummery LJ stated at paragraph 41 that: “It is not, however, punitive and impermissible for a tribunal to order costs without confining them to the costs attributable to the unreasonable conduct”. (Emphasis added on the same basis as previously)[119]The burden of proof in relation to identifying the relevant behaviour, establishing that it is unreasonable, and identifying the costs attributable to that behaviour lies on the applicant for the costs order.[120]Paragraph 20 of Tarafdur reads: “20. Even if the tribunal is satisfied that a party has acted unreasonably in the terms of rule 10, the tribunal nevertheless has a discretion whether or not to make a costs order, or as regards the extent of a costs order. Such a discretion, like any other discretion conferred on the tribunal, must be exercised judicially.”.[121]In terms of Rule 2 of the Rules, that discretion must be exercised in accordance with the overriding objective of dealing with cases fairly and justly.[122]HMRC have pointed out that in relation to costs, Practice Direction 47 stipulates that:
“Routine letters out, routine emails out and routine telephone calls will, in general be allowed on a unit basis of six minutes each, the charge being calculated by reference to the appropriate hourly rate. The unit charge for letters and emails out will include perusing and considering routine letters in your email…”
.

Discussion

[123]A detailed assessment (ie one remitted for quantification to a court as specified in Rule 10(7) of the Rules) would simply put the parties to further cost which would be disproportionate in relation to a bill for just over £20,000. The parties were agreed that summary assessment was appropriate.[124]I agree with Judge Brown KC at paragraph 36 in Harris v HMRC [2022] UKFTT 447 (TC) where she described the nature of summary assessment as follows: “By reference to rule 44.1(1) CPR, summary assessment is the procedure by which a court may, having made an order for a party to pay costs of a case, determine the amount of such costs. It is usually carried out by the judge hearing the matter. It is not intended to involve a lengthy consideration of each item of costs claimed but, rather, represents a proportionate means of justly, fairly and swiftly resolving the question of costs without the need for further costly proceedings regarding the costs themselves. In colloquial terms it is a somewhat rough and ready means of dealing with costs; its roughness is justified on the grounds of proportionality.”.[125]In most decisions on applications for costs to be assessed on a summary basis, there would be a comparatively limited narrative of the background, and particularly the background before the appeal is lodged, in the decision. In this decision, dealing with a very unusual history and Application, I have narrated the background at some considerable length because the appellant is a litigant in person and, although in the course of the hearing I repeatedly endeavoured to explain the intricacies of the costs regime and the limits of the Tribunal’s jurisdiction in that regard, it is only fair that I explain the situation in writing as fully as possible.[126]As I will explain, HMRC are correct in arguing that the Application is disproportionate and overstated. However, I accept that that is a result of the appellant’s approach to the enquiry and subsequent litigation and his lack of knowledge of the costs regime in civil litigation. In that regard, I explain that in many, if not most, civil litigation cases, the amount awarded falls far short of the costs actually incurred, eg where a solicitor or Counsel has been instructed. In my view the Schedule is not a deliberate attempt to profit from the Application; it is a misunderstanding.[127]The appellant has explained that although he worked full time, all his other waking hours and annual leave were devoted to dealing with the HMRC enquiry and then the appeals. He is an accountant (CEMA) and a very articulate and able man working as a consultant, not just in IT but also design projects. He works flexibly from home with no precision as to working hours and he freely admitted that dealing with the issues with HMRC had become “all consuming”.[128]Mr Mohammad confirmed that the whole problem had become a “personal, emotional and mental investment which had overwhelmed and engulfed” the appellant.[129]I accept that. The mental stress for the appellant has been huge. Furthermore, in March 2025, he had been diagnosed with “severe bilateral carpal tunnel syndrome”. I understand that after the hearing his physical condition “deteriorated severely”.[130]As I indicated in the course of the hearing, I do understand that, throughout, the appellant has considered the enquiry, the two appeals and the Application to be a continuum. His argument was that: “There is an uninterrupted causal link with respect to HMRC’s unreasonable actions directly necessitating the work done between June 2021 and August 2024…. which led to the incurrence of the substantial costs…it would be artificial and unjust to exclude the work from 4th June 2021 to 10th August 2024 from consideration."[131]It was also very clear that the distinction between the Tribunal and HMRC in terms of the appeal process and the Tribunal’s jurisdiction has never been apparent to the appellant despite the explanations that were offered on many occasions. In his first Skeleton Argument dated 5 August 2025, this confusion is evident where he stated: “The work from June 2021 onwards was directly caused by HMRC’s unreasonable conduct and relates to the one and only decision the Respondent has made which is dated the 31st March 2022 and both the first and second appeal appealed this decision. The only occasion when this decision was withdrawn was under cover of the respondents (sic) email dated 10th August 2024…”.[132]A similar argument is advanced at numbered paragraph 9 in the Supplemental Skeleton Argument and it is quite simply incorrect.[133]It is trite law, (see eg Mrs Justice Simler DBE in Kotton v First Tier Tribunal (Tax Chamber) and another [2019] EWHC 1327 (Admin) albeit that relates to Information Notices) that, absent acting irrationally or in bad faith, HMRC have every right to open an investigation to check whether a taxpayer has paid the correct amount of tax and a valid investigation may result in no tax charge at all. Although the appellant has consistently argued that HMRC’s behaviour in the enquiry and in the First Appeal was irrational, this is a specialist Tribunal and I find that the approach taken by HMRC to the enquiry was certainly not irrational and indeed followed what might be described as a routine pattern.[134]As can be seen from paragraph 59 above, there is no doubt that the appellant had failed to submit SATRs and had not declared rental income. HMRC were entitled to check his tax position. The outcome does not change that.[135]I have explained at paragraphs 18 to 30 above the reasons why neither the March or June 2022 Letters could be the subject matter of an appeal to the Tribunal; they were not appealable decisions, and the Tribunal has, and had, no jurisdiction in that regard and would have had to strike out the First Appeal had the appellant not withdrawn the appeal. Theoretically, HMRC could have claimed the costs of the First Appeal because, as can be seen, the appellant was repeatedly told that there was no appealable decision. I presume that they did not do so given that the appellant is a litigant in person. In any event, given Ms Man’s concession at paragraph 17 above, that would not have been appropriate.[136]HMRC’s approach in the First Appeal was precisely what they were required to do and had they not done so, the Tribunal would have had to address the issue of lack of jurisdiction.[137]In Distinctive UT at paragraphs 69 and 70, the Upper Tribunal lists the requirements for a valid schedule and that includes the following which are relevant for a party litigant, namely:(1) name;(2) hourly rate;(3) dates when the work in question was carried out; and(4) time spent on those dates.[138]The appellant has complied with the first two but there are many issues with the latter two. For example:(a) Item 004 –168 hours, ie £3,192 on 4 June 2021 responding to the request for information in the enquiry.(b) Item 31 – 103 hours, ie £1,957 on 26 April 2022 (see paragraph 33 above).(c) Item 44 – 25 hours, ie £475 on 2 January 2023 (see paragraph 49 above).(d) Item 75 – 28 hours, ie £532 on 31 March 2023 (see paragraph 58 above).(e) Item 91 – 26 hours, ie £494 on 3 August 2023 (see paragraph 65 above).(f) Item 123 – 25 hours, ie £475 on 19 June 2024.[139]However, the Application was made in time and in writing. It provides most but not all of the information required for a summary schedule of costs. It is not therefore strictly compliant with Rule 10(3)(b) of the Rules. However, there is sufficient information both to enable me to assess the reasonableness of the claim in principle and for HMRC to have challenged its quantum. They did, and in some detail.[140]In their Skeleton Argument HMRC pointed out that the Application covered four distinguishable periods of time, namely:(a) The time spent during the enquiry period, between 19 February 2021 and 26 April 2022, where the appellant has claimed 341 hours at a cost of £6,473.30.(b) The time relating to the First Appeal, between 27 April 2022, being the day that the Notice of Appeal was lodged with the Tribunal and 2 June 2023 being the day that the Tribunal notified the appellant that if no response was received to their letter of 13 April 2023 the file would be closed. The appellant has claimed 294 hours at a cost of £5,586.(c) The time between the Tribunal closing their file and the appellant submitting a new Notice of Appeal, between 2 June 2023 and 28 June 2023. The appellant has claimed one hour at £19.(d) The time from when the appellant filed his Notice of Appeal for the Second Appeal, re 28 June 2023. The appellant has claimed 337.8 hours at a cost of £6,418.20.[141]In addition, the appellant has claimed an uplift of 25% (see paragraph 7 above). I find that the appellant is correct is stating that HMRC could have withdrawn at an earlier date but I do not accept that HMRC’s behaviour, at any stage, was bordering on frivolous and vexatious and/or unreasonable to a high degree. I agree with HMRC that no uplift would be awarded.[142]As can be seen from paragraph 9 above, HMRC had conceded that they would pay costs, on the basis that they had been unreasonable. Mr Singh had assumed that they had conceded that all of their behaviour was unreasonable. That assumption was not correct, as their response to the Application inferred.[143]It was only in the course of the hearing, after I had explained the Tribunal’s jurisdiction and referred the parties to Tarafdar and granted an adjournment to allow parties to read the case, that Ms Man confirmed why HMRC had withdrawn when they had. I had referenced Trafadur because of paragraph 20 thereof (quoted at paragraph 111 above) as, notwithstanding HMRC’s concession that they had acted unreasonably, I need to make a finding as to what was unreasonable and then decide, in light of that, what discretion I would exercise.[144]She stated that after the witness statements were filed in July 2024, the litigator, Mr McCabe, then referred the matter to HMRC’s Policy and Technical teams. On receiving advice from Policy and Technical they decided to withdraw. I have no information about what that advice would have been beyond Ms Man’s suggestion that it was thought that HMRC’s case was not as strong as it should be and that that should have been identified before the Statement of Case was filed. Therefore, the appellant should be given the benefit of any doubt and reasonable costs in the Second Appeal should be awarded from January 2024.[145]There are a number of problems with that explanation. Firstly, as can be seen from paragraphs 52, 58 and 59 above, the five witness statements had previously been filed with HMRC as long ago as February 2023 and that was before the Review Conclusion letter was issued on 31 March 2023, let alone before the appeal was lodged with the Tribunal on 28 June 2023. Further as I have noted at paragraph 70 above, Mr McCabe had actively addressed with the appellant the Review Conclusion letter.[146]Secondly, it is apparent that Mr McCabe, being an experienced litigator, had asked Policy and Technical in October 2023 (see also paragraph 70 above) for advice. They would have had the Review Conclusion letter and, as can be seen, that referred to, and commented upon, the witness statements. It is highly regrettable that that advice was not forthcoming before the end of August 2024. On the balance of probabilities, on the limited evidence that I have, I find that HMRC withdrew the defence to the appeal because, finally, the advice from “Policy and Tech” was produced to Mr McCabe.[147]I find that the only unreasonable behaviour on the part of HMRC was the delay in obtaining that advice. The Review Officer clearly did take cognisance of the witness statements as can be seen from paragraph 59 above. Clearly, the Review Officer, unlike Mr McCabe, did not recognise the potential impact, however, a reasoned and potentially plausible explanation was given. The “Statement of Truth” is in the Bundle and the appellant did describe the property as “derelict”.[148]I find that the cost of obtaining five one page, very short witness statements would be a cost of and incidental to the proceedings in the Second Appeal, albeit incurred before the proceedings commenced. However, all that the witness statements say is that the witnesses had seen the property at a given time and the property was not derelict.[149]The appellant has claimed 30 hours, ie £570 for one day, namely 8 February 2023, for production of three of those statements and 10 hours, ie £190 for the fourth statement. Unsurprisingly, HMRC argue that that is unreasonable and unrealistic.[150]It is, as are many of the other items in the Schedule.[151]As an example, I asked the appellant how he could justify item 98 on 6 September 2023 (see paragraph 68 above) where he claimed 4 hours, ie £76 to send an email giving his telephone number and confirming that ADR had not been pursued but was being considered. He said that he had been working when he received the email so he had gone to see Mr Mohammed to discuss the questions posed by HMRC.[152]He also explained that at every stage he had tried to take advice wherever possible not only from Mr Mohammed but also from anyone else who could help, such as friends who were accountants and barristers.[153]Although he worked flexible hours, quite apart from the claims that exceeded the number of hours in the day, there are several examples in the Schedule of claims of five hours, seven hours and nine hours being claimed in a single day (and on one occasion 20 hours) for a given task. Two examples stand out, namely:(a) Item 26 on 30 June 2022 where he claimed seven hours for the one page letter I describe at paragraph 38 above, and(b) Item 150 on 30 August 2024 where he claimed seven hours for the one page email I describe at paragraph 93 above.[154]As HMRC have pointed out, having regard to the Practice Direction, there are at least 60 entries relating to incoming emails and/or correspondence which, if costs were to be awarded for those items, have been significantly overcharged.[155]There are other problems such as that for example some of the items claimed relate to contact with Preston City Council about council tax, nondomestic rates and the need for inspection of the property.[156]In addition, a number of the items claimed relate to the appellant’s SATRs. For example, item 76 is a claim for 14 hours, ie £266 for submission of the appellant’s 2021/22 SATR on 9 April 2021 and item 143 is a claim for five hours i.e. £95 for submission of the appellants 2023/24 SATR on 13 August 2024.[157]As can be seen from paragraph 15 above, the Second Appeal was concerned with the years 2013/14 to 2020/21 only. Although, from the appellant’s perspective, subsequent tax returns are viewed as being “incidental” to the Second Appeal they most certainly are not for the purposes of a claim for costs. Each tax year stands alone.[158]As Judge Brown KC made clear (see paragraph 124 above), summary assessment does not involve a detailed analysis, so I have not addressed every item to which HMRC have taken exception.[159]The appellant conceded that he had not kept contemporary records of his time. Accordingly, I can only assume that the exercise of claiming costs must include a large element of hindsight, guesswork and reconstruction of the past. There is a limit to the latitude that I can allow to a litigant in person who will, in a task like this, inevitably take longer than a lawyer but I accept that he will have taken longer.[160]Ms Man made the point that HMRC’s costs in the Second Appeal totalled approximately £7,000.[161]I am well aware that, even in 2019, an HMRC trainee solicitor or paralegal had a cost per hour of £126 and a solicitor £196 per hour (an experienced litigator was charged at £317 per hour). Taking the most favourable approach for the appellant, ignoring the fact that HMRC were trying to get advice, assuming that all HMRC’s work was done by a trainee, and it was not, that would mean approximately 55 hours. At £19 per hour, the appellant’s claim would have been of the order of £1,045.[162]Even if a party litigant took, say, three times the time a trainee might take that would suggest a total cost for the Second Appeal, where the appeal had not even reached the disclosure stage, of £3,135.[163]HMRC have conceded that, given the situation with the witness statements, a claim of one hour for each witness statement in February 2023 (which antedates the Second Appeal) would not be contested. I have accepted that those are costs that are incidental to the Second Appeal and given that the witness statements could, at best, be described as minimalist that is a pragmatic and appropriate approach. That raises HMRC’s “offer” to £370.50.[164]What of the costs of the enquiry, the First Appeal and after HMRC withdrew their appeal?[165]Whilst, for the reasons that I have explained, I cannot know exactly how much time the appellant spent on anything, I do accept that he spent a huge amount of time focussed on HMRC and what they did, or did not, do.[166]As I indicated, for the appellant’s benefit, I have highlighted parts of the quotations in the section on the Legal Framework.[167]As a starting point, since the appellant has consistently argued that HMRC have acted in bad faith, albeit I have found, as a matter of fact, that they did not, I refer to paragraph 114 above and the latter part of the quotation from Distinctive CA. Bad faith cannot be an issue in this Application but quite apart from that, contrary to the appellant’s assertions, I find that Mr McCabe behaved with integrity throughout, referring the matter for advice at the outset and promptly withdrawing when that was finally delivered.[168]I do find that HMRC, as an organisation, should have withdrawn before the Statement of Case was filed; they had the time because of the extensions of time to do so but internally that did not “work”.[169]That takes me to the enquiry and the appellant’s claims in that regard. I have explained that HMRC were wholly justified in opening and pursuing an enquiry in a situation where the appellant had failed to declare his rental income. The enquiry was the result of the appellant’s own failures, and the consequential costs are his responsibility, albeit he was ultimately successful. That is by no means an unusual situation but the costs of an HMRC enquiry are exceptionally rarely recoverable to any extent; hence the buoyant market in insurance for just such an eventuality.[170]I have also made it clear that the First Appeal was unfounded and would have been struck out had the appellant not withdrawn the appeal.[171]For the reasons given. I accept that, on the evidence available to him, the Review Officer provided a cogent reason for rejecting the witness statements which came from inter alia the appellant’s family. The quotation from MORI at paragraph 46 cited at paragraph 117 above, makes it clear that the officer’s decision should not be considered through the prism of hindsight. For the same reason, given that the officer explained that the very late submission of details of very large expense claims (see paragraph 59 above) was a challenge, I do not accept that it should have been clear to HMRC that in the words of the quotation at paragraph 114 above that “the appeal cannot be properly defended”.[172]Mr McCabe put in place a rigorous review when he took carriage of the appeal.[173]Apart from the costs relating to the witness statements, none of the costs in either the enquiry or the First Appeal are in any way attributable to the admittedly unreasonable conduct of HMRC in not withdrawing their defence at an earlier stage, ie when the Statement of Case was due to be lodged.[174]CPR 46.5 (4)(b) makes it explicit that the costs of a party litigant must be “an amount for the time reasonably spent on doing the work…”. In my experience, for a litigation at such an early stage, even £3,135 for the time of a party litigant would be very generous; the amount claimed in this instance for an appeal where it had not even reached the stage of disclosure could be described as extraordinary.[175]I refer to, and rely on, the quotation at paragraph 116 above. It is possible that the appellant did spend all the time he says on matters that he considered to be incidental to the Second Appeal. However, his subjective intention or view is simply not relevant. For example, none of the costs relating to his later SATRs or correspondence/meetings with Preston City Council could possibly form part of a claim for costs in this appeal. Objectively considered they are not part of an appeal relating to matters ending in 2021 nor can they be incidental to that in the sense that the case law defines incidental costs.[176]Lastly, I have indicated at paragraph 118 that I am not constrained to confining the costs award to the costs directly attributable to the failure to withdraw in January 2024. I cited that case in fairness to the appellant since, in their Skeleton Argument, HMRC had argued that I should restrict any award on the basis of Judge Zaman’s statement at paragraph 85 of Shinelock v HMRC [2021] UKFTT 0318 (TC) where she said that: “This leads me to conclude that, when making an order in respect of costs to date, I should apply a discount to reflect Shinelock’s share of responsibility”.[177]In my view, HMRC’s well founded argument was that in particular, the appellant’s detailed time and communication in relation to the Bundle for this hearing (see for example paragraph 106 above) had been unwarranted. There were other examples. I do need to recognise the appellant’s behaviour.[178]I have carefully considered all of the factors that have been brought to my attention, and, because of the appellant’s health issues, in greater depth than a summary assessment usually warrants, but in Judge Brown’s words I must make a “rough and ready” assessment or, as Ms Man put it, take a “broad brush approach”. I have done so.[179]I recognise that the appellant was, by his own admission, fixated by everything related to HMRC’s enquiry into his property ownership and believes that he should be recompensed for every hour he has spent dealing with it.[180]Sadly for him, that is not the test. I have to have due regard to Rule 2 of the Rules and act fairly and justly to both parties. I have to look at what is objectively reasonable in all of the circumstances.[181]I consider that HMRC’s current offer of £370.50 to be too low.

Decision

[182]For all these reasons, I therefore consider it reasonable and in accordance with the overriding objective to award the appellant costs in the sum of £2,000.[183]The outcome is that, within 21 days of the date of release of this decision on costs, HMRC shall pay the appellant the costs of the Application, summarily assessed in the sum of £2,000.

Right to apply for permission to appeal

[184]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Release date: 06th JANUARY 2026