Konstruct Recruitment Limited & Anor v The Commissioners for HMRC

Konstruct Recruitment Limited & Anor v The Commissioners for HMRC

The Tribunal found that, at the very least, Rajanbir Singh and therefore Konstruct Recruitment Limited should have known that the transactions were connected to the fraudulent evasion of VAT. The overall circumstances, including repeated warnings, the pattern of engaging suppliers linked to tax losses, inadequate due diligence, and the lack of commercial documentation, led to the conclusion that the appellants either knew or should have known of the connection to fraud. The s 69C penalty and s 69D Personal Liability Notice were properly issued and attributable to Rajanbir Singh as sole director.

Parties
First Appellant: Konstruct Recruitment Limited; Second Appellant: Rajanbir Singh; Respondents: The Commissioners for HM Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
11 September 2024
Procedural Posture
Tax Appeal / Judgment After Full Hearing
Outcome
Appeals dismissed
Legal Topics
Value Added Tax (vat), Input Tax Deduction, Fraudulent Evasion of VAT, Personal Liability Notice, Construction Industry Scheme (cis), Penalties Under VATA
Tax Law Administrative Law Value Added Tax (vat) Input Tax Deduction Fraudulent Evasion of VAT Personal Liability Notice Construction Industry Scheme (cis) Penalties Under VATA

Case Brief

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Parties

Konstruct Recruitment Limited

First Appellant

Rajanbir Singh

Second Appellant

The Commissioners for HM Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / Judgment After Full Hearing

Legal Issues

  1. 1 Whether Konstruct Recruitment Limited knew or should have known that its transactions were connected with the fraudulent evasion of VAT
  2. 2 Whether the actions of Konstruct Recruitment Limited are attributable to Rajanbir Singh for purposes of a Personal Liability Notice under s 69D VATA
  3. 3 Whether the s 69C penalty and s 69D PLN were properly issued

Ratio Decidendi

The Tribunal found that, at the very least, Rajanbir Singh and therefore Konstruct Recruitment Limited should have known that the transactions were connected to the fraudulent evasion of VAT. The overall circumstances, including repeated warnings, the pattern of engaging suppliers linked to tax losses, inadequate due diligence, and the lack of commercial documentation, led to the conclusion that the appellants either knew or should have known of the connection to fraud. The s 69C penalty and s 69D Personal Liability Notice were properly issued and attributable to Rajanbir Singh as sole director.

Court Disposition

Appeals dismissed

Orders

  • The appeals of Konstruct Recruitment Limited and Rajanbir Singh are dismissed.
  • The s 69C penalty and s 69D Personal Liability Notice are upheld.