The Khan Partnership LLP v The Commissioners for HMRC
Decision date: 9 January 2026
Neutral citation: [2026] UKFTT 43 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerns HMRC's application for costs under Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules r.10(1)(b) arising from separate hardship proceedings brought by The Khan Partnership LLP. The Tribunal held the hardship proceedings were severable from the underlying VAT appeal, found the Appellant acted unreasonably in those proceedings, and awarded HMRC summary-assessed costs of £3,151.80 for work from 22 April 2024 to 29 May 2025, dismissing recovery of pre-22 April 2024 decision-making costs. The sum must be paid within 14 days.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The Tribunal treated hardship proceedings as distinct from the substantive appeal and held it had jurisdiction to award costs under r.10(1)(b) for unreasonable conduct during those proceedings; recoverable costs are limited to reasonable costs incurred in the Tribunal proceedings themselves (here 22 April 2024–29 May 2025), and pre-proceedings decision-making costs are not recoverable as incidental to the hardship proceedings.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The judgment observed that misstatements in a notice of appeal by an experienced representative (for example, wrongly stating the disputed VAT had been paid) and persistent non-compliance with Tribunal directions can weigh in favour of a costs award, and that the protective purpose of the hardship regime does not automatically bar costs where a party has been dilatory or obstructive.