Butt v Revenue And Customs

Butt v Revenue And Customs

Section 60 VATA provides a clear and unambiguous legal basis for imposing a penalty where a person dishonestly claims a VAT credit to which they are not entitled, and the Halifax/Kittel principle means that fraudulent transactions fall outside the scope of VAT deduction; this does not offend the principle of legal certainty or legality in criminal law.

Parties
Appellant: Umaad Butt; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
03 April 2019
Procedural Posture
Appeal / Court of Appeal Judgment
Outcome
Appeal dismissed
Legal Topics
VAT Evasion, MTIC Fraud, Penalties, Conforming Interpretation, Abuse of Rights, Legal Certainty, Criminal Liability
Tax Law European Union Law Criminal Law VAT Evasion MTIC Fraud Penalties Conforming Interpretation Abuse of Rights +2 more

Case Brief

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Parties

Umaad Butt

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Whether the Kittel principle can be relied on to penalise a UK taxpayer in the absence of specific legislation
  2. 2 Whether criminal penalties can be imposed by modifying domestic law to be consistent with EU law
  3. 3 Whether section 60 VATA provides a clear and unambiguous legal basis for imposing a penalty

Ratio Decidendi

Section 60 VATA provides a clear and unambiguous legal basis for imposing a penalty where a person dishonestly claims a VAT credit to which they are not entitled, and the Halifax/Kittel principle means that fraudulent transactions fall outside the scope of VAT deduction; this does not offend the principle of legal certainty or legality in criminal law.

Court Disposition

Appeal dismissed

Orders

  • The penalty imposed on Mr Butt under section 61 VATA is upheld.
  • No changes to VATA are required for the application of sections 60 and 61 in this case.