YBA Limited v The Commissioners for HMRC

YBA Limited v The Commissioners for HMRC

YBA should have known, from the circumstances and lack of sufficient due diligence, that its relevant purchases and sales were connected with fraudulent VAT evasion. The only reasonable explanation for the transactions was their connection to fraud. Where HMRC failed to prove the connection or fraud, the appeal succeeded for those transactions.

Parties
Appellant: YBA Limited; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
13 September 2024
Procedural Posture
Tax Appeal / First Tier Tribunal Judgment
Outcome
Appeal dismissed in part and allowed in part
Legal Topics
VAT Fraud, Deregistration, Input Tax Denial, Zero Rating Denial, MTIC Fraud, Burden of Proof
Tax Law VAT Fraud Deregistration Input Tax Denial Zero Rating Denial MTIC Fraud Burden of Proof

Case Brief

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Parties

YBA Limited

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Judgment

Legal Issues

  1. 1 Whether YBA's VAT registration was used to facilitate VAT fraud and whether YBA knew or should have known of the connection to fraud
  2. 2 Whether VAT assessments (general, Kittel, Mecsek) were valid and properly notified
  3. 3 Whether YBA was entitled to input tax relief and zero-rating on sales

Ratio Decidendi

YBA should have known, from the circumstances and lack of sufficient due diligence, that its relevant purchases and sales were connected with fraudulent VAT evasion. The only reasonable explanation for the transactions was their connection to fraud. Where HMRC failed to prove the connection or fraud, the appeal succeeded for those transactions.

Court Disposition

Appeal dismissed in part and allowed in part

Orders

  • YBA's appeal against deregistration for VAT is dismissed.
  • YBA's appeal against the general assessment is dismissed.