Promeridian Services Ltd & Anor v Revenue and Customs (VAT - Kittel - connection - knew or should have known) [2025] UKFTT 296 (TC) (07 March 2025)

Promeridian Services Ltd & Anor v Revenue and Customs (VAT - Kittel - connection - knew or should have known) [2025] UKFTT 296 (TC) (07 March 2025)

The Tribunal found that, although there were factors raising suspicion (prior contact with TCS's director and basic errors on invoices), HMRC failed to prove on the balance of probabilities that Promeridian or Mr Marian knew or should have known that their transactions with TCS were connected to VAT fraud. The evidence did not establish that the only reasonable explanation for the transactions was a connection to fraud. The appeals against the Kittel Decision, the Company Penalty, the Ablessio Decision, and the Personal Liability Notice were therefore allowed.

Citation
[2025] UKFTT 296 (TC)
Parties
First Appellant: Promeridian Services Limited; Second Appellant: Mr Leon Marian; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
07 March 2025
Procedural Posture
VAT Appeal (first Tier Tribunal, Tax Chamber) / Final Judgment After Full Hearing
Outcome
Appeals allowed
Legal Topics
VAT Fraud, Input Tax Deduction, Kittel Principle, Ablessio Principle, Personal Liability Notice, Due Diligence, Burden of Proof
Tax Law European Union Law VAT Fraud Input Tax Deduction Kittel Principle Ablessio Principle Personal Liability Notice Due Diligence +1 more

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Parties

Promeridian Services Limited

First Appellant

Mr Leon Marian

Second Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

VAT Appeal (first Tier Tribunal, Tax Chamber) / Final Judgment After Full Hearing

Legal Issues

  1. 1 Whether Promeridian knew or should have known its transactions with TCS were connected to VAT fraud
  2. 2 Whether there were objective grounds for VAT deregistration under the Ablessio principle
  3. 3 Whether Promeridian is liable for the Company Penalty

Ratio Decidendi

The Tribunal found that, although there were factors raising suspicion (prior contact with TCS's director and basic errors on invoices), HMRC failed to prove on the balance of probabilities that Promeridian or Mr Marian knew or should have known that their transactions with TCS were connected to VAT fraud. The evidence did not establish that the only reasonable explanation for the transactions was a connection to fraud. The appeals against the Kittel Decision, the Company Penalty, the Ablessio Decision, and the Personal Liability Notice were therefore allowed.

Court Disposition

Appeals allowed

Orders

  • The appeals against the Kittel Decision, the Company Penalty, the Ablessio Decision, and the Personal Liability Notice are allowed.