The FTT has directed HMRC to pay the taxpayer’s costs on the indemnity basis following HMRC’s late concession of the appeal. The appeal concerned the charity’s recovery of input VAT in the course of its business of broadcasting a TV channel. HMRC sought to argue that the charity was also carrying on a non-economic activity in respect of some programmes that it broadcast without charge, and could only deduct a proportion of its input VAT. Two weeks before the hearing was due to commence, HMRC conceded the appeal and allowed the taxpayer’s claims in full.
The Tribunal applied the guidance in Tarafdar v HMRC [2024] UKUT 0362 (TC) and concluded that HMRC’s late concession amounted to a significant level of unreasonableness such that the appropriate basis of assessment was the indemnity basis.
You can read the judgment here.
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