Tax litigation lawyers have seen a 14% increase in tribunal cases as a result of more aggressive tax collection by HM Revenue & Customs.

A report by accountants UHY Hacker Young found that tax tribunals cases grew from 4,311 in 2007 to 4,897 in 2008, with the number of appeals likely to have risen still further since the introduction of the unified tax tribunal last year.

The 14% rise followed HMRC’s adoption of more aggressive tax collection methods, including pursuing cases through the courts rather than negotiating settlements.

The report adds that due to record levels of public debt, there is growing pressure on HMRC to boost the amount of tax collected.

Liesl Fichardt, a contentious tax partner at City firm Berwin Leighton Paisner, said ‘reputational risk’ no longer deterred companies and individuals from tax litigation.

‘There is a growing confidence that HMRC can be beaten in court, especially since April 2009 when the new unified tax tribunal consolidated everything under one roof and brought new efficiencies to the process. The tribunal is now independent and not, as before, controlled by HMRC.’

Clark Sargent, a partner in the commercial litigation team at Birmingham firm Wragge & Co, said the growth in appeals looked set to continue as tax lawyers examined the increasing number of claims that HMRC has wrongly levied VAT on exempt products and services – such as Marks & Spencer teacakes.