One Call Consultants Ltd & Anor v Revenue and Customs (VAT - Kittel - knew or should have known - personal liability notice) [2026] UKFTT 156 (TC) (26 January 2026)

One Call Consultants Ltd & Anor v Revenue and Customs (VAT - Kittel - knew or should have known - personal liability notice) [2026] UKFTT 156 (TC) (26 January 2026)

The Tribunal found that OCC's transactions with the payroll providers were connected with fraudulent evasion of VAT and that Mr McGrail, as sole director, knew or should have known of this connection. The due diligence conducted was inadequate and failed to address clear risk factors. HMRC lawfully denied input tax, deregistered OCC, and imposed penalties under s69C and s69D VATA 1994. The appeals were dismissed.

Citation
[2026] UKFTT 156
Parties
First Appellant: One Call Consultants Ltd; Second Appellant: Mr Lewis McGrail; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
26 January 2026
Procedural Posture
VAT Appeal (input Tax Denial, Deregistration, Penalties) / First Tier Tribunal (tax Chamber) Final Judgment
Outcome
Appeal dismissed
Legal Topics
VAT Fraud, Input Tax Denial, Personal Liability Notice, Deregistration, Penalties Under VATA 1994, Kittel Principle, Due Diligence, Burden of Proof
Tax Law European Union Law Administrative Law VAT Fraud Input Tax Denial Personal Liability Notice Deregistration Penalties Under VATA 1994 +3 more

Case Brief

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Parties

One Call Consultants Ltd

First Appellant

Mr Lewis McGrail

Second Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

VAT Appeal (input Tax Denial, Deregistration, Penalties) / First Tier Tribunal (tax Chamber) Final Judgment

Legal Issues

  1. 1 Whether OCC's transactions were connected with fraudulent evasion of VAT
  2. 2 Whether OCC and Mr McGrail knew or should have known of the connection to fraud (Kittel test)
  3. 3 Whether HMRC lawfully denied input tax, deregistered OCC, and imposed penalties under s69C and s69D VATA 1994

Ratio Decidendi

The Tribunal found that OCC's transactions with the payroll providers were connected with fraudulent evasion of VAT and that Mr McGrail, as sole director, knew or should have known of this connection. The due diligence conducted was inadequate and failed to address clear risk factors. HMRC lawfully denied input tax, deregistered OCC, and imposed penalties under s69C and s69D VATA 1994. The appeals were dismissed.

Court Disposition

Appeal dismissed

Orders

  • Input tax denial upheld for VAT periods 05/19 – 02/20 in the sum of £314,401
  • Deregistration of OCC from VAT with effect from 21 October 2020 upheld