asked the Chancellor of the Exchequer whether Her Majesty's Customs and Excise have completed the review of their policy towards costs of unsuccessful appeals by taxpayers to the independent value added tax tribunals; and if he will make a statement.
Yes. Customs and Excise now has more than five years' experience of using the tribunal system to deal with a wide range of questions relating to VAT, some of great legal complexity which would otherwise be appropriate to the High Court. The machinery has proved flexible in handling not only issues of principle but also smaller cases where the informality of the proceedings has made it possible for taxpayers to argue their own cases without representation. In the light of the review, the commissioners have concluded that, as a general rule, they should continue their policy of not seeking costs against unsuccessful appellants; however, they will ask for costs in certain cases so as to provide protection for public funds and the general body of taxpayers. For instance, they will seek costs at those exceptional tribunal hearings of substantial and complex cases where large sums are involved and which are com parable with High Court cases, unless the appeal involves an important general point of law requiring clarification. The commissioners will also consider seeking costs where the appellant has misused the tribunal procedure—for example, in frivolous or vexatious cases, or where the appellant has failed to appear or to be represented at a mutually arranged hearing without sufficient explanation, or where the appellant has first produced at a hearing relevant evidence which ought properly to have been disclosed at an earlier stage and which could have saved public funds had it been produced timeously.In all cases the question whether or not costs should be awarded will, of course, remain entirely within the discretion of the tribunal concerned and the amount of any such award will be fixed either by that tribunal, or by the High Court, as provided by tribunal procedure rules.The Council on Tribunals has been consulted and sees no objection to this proposed policy, subject to its having the opportunity to monitor its effect.