TC09506 - [2025] UKFTT 00497 (TC)

The grounds for the opt out application are as follows:

Whilst the application is being made outside the 28 day limit, now that the appeal has been reinstated, it is being made at an early stage in the proceedings and will have no impact on the litigation timetable nor on any future hearing dates.

HMRC will not suffer any material prejudice if the application is granted. They will need to do no further work in respect of preparing their case.

The appellant relied on Mr Ved to make the appropriate application to opt out of the cost regime, but he failed to do so. It was reasonable for the appellant to rely on Mr Ved, as he had always done in relation to his tax affairs.

Reinstatement of the appeal should reset the time when the 28 day period to opt out starts as it presents the appellant with an opportunity to approach this as a new appeal with new advisers.

It is in the interests of justice and fairness, and is within the overriding objective of the tribunal, to grant the opt out application.

The delay in applying to opt out is serious and significant. The letter issued to the appellant confirming that the case had been allocated to the complex track was issued to him on 17 August 2023. The deadline to opt out was 14 September 2023. The opt out application therefore is approximately one year and seven months late.

Both the tribunal’s letter of 17 August 2023 and HMRC’s letter to the appellant of 22 September 2023 deal with the costs position, and the appellant’s right to opt out of the cost regime, clearly and in detail. These letters were given to Mr Ved who failed to act on them. This failure is attributed to the appellant.

The appellant’s underlying case is a weak one. It would not be fair and just to prevent HMRC recovering their costs in the event that they were successful simply because the appellant had failed to exercise his right to opt out of the cost regime within the specified time limit. The purpose of the cost regime is to provide certainty at an early stage in proceedings and not to allow a taxpayer to see how their case progresses.