Citibank NA v Revenue & Customs [2014] UKFTT 1063 (TC) (28 November 2014)

Citibank NA v Revenue & Customs [2014] UKFTT 1063 (TC) (28 November 2014)

The Tribunal held that HMRC's statement of case was defective in failing to make clear whether dishonesty was alleged against the appellant and certain third parties, and in not clarifying the relevance of certain pleaded facts. Where knowledge of connection to fraud is alleged, this amounts to an allegation of...

Source-derived case information.

Citation
[2014] UKFTT 1063 (TC)
Parties
Appellant: Citibank NA; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
28 November 2014
Procedural Posture
VAT Appeal (mtic Fraud Allegations) / Interlocutory Application for Further and Better Particulars of Statement of Case
Outcome
Partially allowed; directions issued
Legal Topics
VAT Fraud, MTIC Fraud, Pleading Requirements, Particularisation of Fraud, Corporate Knowledge, Attribution of Knowledge, Timeliness of Assessment
Tax Law Civil Procedure VAT Fraud MTIC Fraud Pleading Requirements Particularisation of Fraud Corporate Knowledge Attribution of Knowledge +1 more

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Parties

Citibank NA

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Appeal (mtic Fraud Allegations) / Interlocutory Application for Further and Better Particulars of Statement of Case

Legal Issues

  1. 1 Whether HMRC's statement of case sufficiently particularised allegations of fraud or dishonesty against the appellant and third parties
  2. 2 Whether the statement of case must expressly plead dishonesty or fraud in MTIC cases
  3. 3 What level of detail and primary facts must be pleaded in the statement of case in the tax tribunal

Ratio Decidendi

The Tribunal held that HMRC's statement of case was defective in failing to make clear whether dishonesty was alleged against the appellant and certain third parties, and in not clarifying the relevance of certain pleaded facts. Where knowledge of connection to fraud is alleged, this amounts to an allegation of dishonesty and must be expressly pleaded with primary facts. HMRC must apply to amend its statement of case to clarify its position on dishonesty and the basis for attributing knowledge to the corporate appellant. Requests for exhaustive particulars or negative pleadings were refused; only primary facts need be pleaded, with further detail to be provided in evidence.

Court Disposition

Partially allowed; directions issued

Orders

  • HMRC must apply to amend its statement of case to clarify whether dishonesty is alleged against the appellant and specified third parties, and to clarify the basis for attributing knowledge to the corporate appellant.
  • If HMRC does not amend its statement of case, it may not pursue allegations of dishonesty or knowledge of contrivance/fraud at the hearing.