In Wind Energy Renewables LLP v Revenue Scotland [2021] FTSTC 2, Revenue Scotland's seemingly altruistic application to have the appellant awarded expenses was really an attempt to pay only a nominal sum. The Tribunal agreed with the appellant's opposition and decided in their favour.

  •  As part of an ongoing Land and Buildings Transaction Tax (LBTT) enquiry, Revenue Scotland issued a Closure Notice to Wind Energy Renewables LLP (the Appellant).
  • The Wind Energy appealed but several months later Revenue Scotland cancelled the notice due to an undisclosed issue regarding not having the correct designated officer conduct the preceding enquiry. Revenue Scotland applied to have the appeal dismissed at the same time.
  • Included within the application was a statement agreeing to meet the appellant's expenses. The appeal was suspended in order to negotiate the expenses to be paid but no agreement was reached.
  • Revenue Scotland then made the application to the Tribunal for a decision.
  • The rules surrounding the awarding of expenses is different in Scotland to those in UK Tribunals. The Scottish Tribunals were created by statute and are limited to what is prescribed by the Tribunals Rules. Rule 10(1) allows for the award of expenses and Rule 10(2) allows for the order of payment of a fixed sum in the discharge of an award.
  • Revenue Scotland applied for either 10(1) or 10(2), as alternatives. No suggestion of the level of expenses to be paid was given except that if it were a fixed payment, it should be for a nominal amount. It was argued that as the expenses would be met by the public purse, the expenses should be restricted.
  • Sottish law operate two levels of award for expenses: 'party and party' and 'solicitor/client'. The first is a restricted award based on attendance in court and the second is an award of all litigation costs (although not full indemnity). Revenue Scotland sought the former basis. The appellant argued for the latter.
  • The Tribunal considered the evidence and decided:
    • Rule 10(2) was only an option where a 10(1) award of expenses had been agreed. Even then it was discretionary.
    • The appellant was clearly entitled to expenses as Revenue Scotland had caused them to incur costs in error.
    • Revenue Scotland had not suggested a fixed sum amount so a fixed sum payment would be ordered.
    • The only option was to award expenses under Rule 10(1) and have the Auditor of the Court assess the amount.
    • Conventional awards for expenses are on a 'party and party' basis. It had been held in a previous Court of Sessions case that the 'solicitor/client' basis was appropriate where one party conducted litigation unreasonably/incompetently and so caused expense. The Tribunal felt it was reasonable to apply the 'solicitor/client' basis here for that same reason.

Useful guides on this topic

LBTT: Land and Buildings Transaction tax
Land and Buildings Transaction Tax (LBTT) is a tax on transactions in land situated in Scotland. It replaced Stamp Duty Land Tax (SDLT) on 1 April 2015.

Closure Notices
When does HMRC issue a Closure Notice? Can a taxpayer demand one? Are there appeal rights? 

Scottish Income Tax: Am I a Scottish Taxpayer?
Who does the Scottish Income Tax apply to? Am I resident in Scotland? What constitutes a residence and the 'main' residence?

External link

Wind Energy Renewables LLP v Revenue Scotland [2021] FTSTC 2

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