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 performed was superficial, failed to address obvious risks, and was focused on satisfying HMRC rather than genuine risk mitigation. The Kittel principle was satisfied, justifying denial of input tax, deregistration, and penalties. The personal liability notice against Mr McGrail was upheld as his actions were attributable to the company.

Citation
[2026] UKFTT 156 (TC)
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, Kittel Principle, Personal Liability Notice, Company Officer Penalties, Deregistration for VAT Fraud, Due Diligence in Supply Chains
Tax Law European Union Law Administrative Law VAT Fraud Input Tax Denial Kittel Principle Personal Liability Notice Company Officer Penalties +2 more

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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 with payroll providers were connected with fraudulent evasion of VAT
  2. 2 Whether OCC and Mr McGrail knew or should have known of the connection to VAT fraud (Kittel principle)
  3. 3 Whether HMRC's denial of input tax, deregistration, and penalties were lawful and proportionate

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 performed was superficial, failed to address obvious risks, and was focused on satisfying HMRC rather than genuine risk mitigation. The Kittel principle was satisfied, justifying denial of input tax, deregistration, and penalties. The personal liability notice against Mr McGrail was upheld as his actions were attributable to the company.

Court Disposition

Appeal dismissed

Orders

  • Denial of input tax in the sum of £314,401 upheld
  • Deregistration of OCC from VAT with effect from 21 October 2020 upheld