Butt v Revenue And Customs [2019] EWCA Civ 554 (03 April 2019)

Butt v Revenue And Customs [2019] EWCA Civ 554 (03 April 2019)

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, including in circumstances where, under the Kittel principle, the right to deduct is lost due to knowledge of fraud. The application of the Kittel/abuse of rights principle does not offend legal certainty or the principle against retrospective criminal liability, as it clarifies the scope of existing law rather than creating new offences.

Citation
[2019] EWCA Civ 554
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
Civil Appeal / Court of Appeal Judgment on Appeal From Upper Tribunal (tax and Chancery Chamber)
Outcome
Appeal dismissed
Legal Topics
VAT Fraud, MTIC Fraud, Input Tax Credit, Director Liability, Penalties Under VATA, EU Law Conformity, Criminal Penalties and Legal Certainty
Tax Law European Union Law Criminal Law (penalties) VAT Fraud MTIC Fraud Input Tax Credit Director Liability Penalties Under VATA +2 more

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Parties

Umaad Butt

Appellant

The Commissioners for Her Majesty's Revenue and Customs

Respondents

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From Upper Tribunal (tax and Chancery Chamber)

Legal Issues

  1. 1 Whether a criminal penalty under section 60 VATA can be imposed by interpreting domestic law in conformity with EU law (Kittel principle) where the statutory wording does not expressly cover the conduct
  2. 2 Whether the imposition of a penalty in these circumstances violates the principle of legal certainty under Article 49 of the EU Charter and Article 7 ECHR

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, including in circumstances where, under the Kittel principle, the right to deduct is lost due to knowledge of fraud. The application of the Kittel/abuse of rights principle does not offend legal certainty or the principle against retrospective criminal liability, as it clarifies the scope of existing law rather than creating new offences.

Court Disposition

Appeal dismissed

Orders

  • The appeal by Mr Butt is dismissed.