In Paul Wheeler v HMRC  TC07164 the FTT granted a costs award against an unrepresented taxpayer for unreasonable behaviour; to be enforced in the future when he has sufficient funds.
In two earlier cases, Mr Wheeler had a fixed £300 penalty upheld and daily late filing penalties for failure to comply with a schedule 36 information notice. The fine was tripled (from £1,600 to £4,800) due to his failure to attend both hearings and general behaviour towards HMRC. The FTT judge determined that he had been deliberately absent from the hearings and that his behaviour was to ‘simply “cock a snook” at HMRC and to an extent the Tribunal’.
HMRC applied to the tribunal for wasted costs of £4,695.15 in respect of the earlier penalty appeals on the grounds that Mr Wheeler’s conduct was unreasonable; he had appealed a second time but then not made any reasonable effort to support his position in that appeal.
The FTT awarded costs but due to Mr Wheelers financial position they were not to be enforced without the express permission of the tribunal, by application and with supporting evidence but with no expiry date.
The outcome means that at any time in the future, HMRC have sufficient evidence to show that Mr Wheeler has the means to pay the costs, they can apply to the Tribunal for permission to enforce the costs order.
Mr Wheeler started with penalties of £1,900 which was arguably a good deal as the maximum allowed by law at that stage would have been £9,900. He had actually complied with part of the information notice but not all of it. He ended up with a bill of £9,495.15, half of which could be hanging over him for some years to come. This is another case illustrating the risks that unrepresented taxpayers take when they appeal to the tribunal without making any effort to understand the process.
Links to our guides:
External case links: