Crotek Ltd & Anor v Revenue & Customs [2011] UKFTT 836 (TC) (16 December 2011)

Crotek Ltd & Anor v Revenue & Customs [2011] UKFTT 836 (TC) (16 December 2011)

The Tribunal found that the Appellants knew, or at least ought to have known, that their transactions were connected with the fraudulent evasion of VAT. This conclusion was based on the cumulative evidence of misleading VAT applications, trading patterns, consistent profit margins, connections to defaulting traders, lack of genuine due diligence, and the Appellants' continued trading despite repeated warnings. The Tribunal found Mr Dad's evidence unreliable and untruthful, and determined that the Appellants' trading behaviour was inconsistent with legitimate commercial practice. Even disregarding disputed evidence, the Tribunal held the evidence overwhelmingly established actual or...

Citation
[2011] UKFTT 836
Parties
Appellant: CSL; Appellant: CL; Respondent: HMRC
Jurisdiction
United Kingdom
Judgment Date
16 December 2011
Procedural Posture
VAT Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeals dismissed
Legal Topics
VAT Fraud, MTIC Fraud, Input Tax Deduction, Due Diligence, Burden of Proof
Tax Law VAT Fraud MTIC Fraud Input Tax Deduction Due Diligence Burden of Proof

Case Brief

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Parties

CSL

Appellant

CL

Appellant

HMRC

Respondent

Procedural Posture

VAT Appeal / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether the Appellants knew or ought to have known their transactions were connected with fraudulent evasion of VAT
  2. 2 Whether HMRC's investigation and disclosure obligations were met
  3. 3 Whether Appellants' due diligence was adequate

Ratio Decidendi

The Tribunal found that the Appellants knew, or at least ought to have known, that their transactions were connected with the fraudulent evasion of VAT. This conclusion was based on the cumulative evidence of misleading VAT applications, trading patterns, consistent profit margins, connections to defaulting traders, lack of genuine due diligence, and the Appellants' continued trading despite repeated warnings. The Tribunal found Mr Dad's evidence unreliable and untruthful, and determined that the Appellants' trading behaviour was inconsistent with legitimate commercial practice. Even disregarding disputed evidence, the Tribunal held the evidence overwhelmingly established actual or...

Court Disposition

Appeals dismissed

Orders

  • Appellants to pay the reasonable costs of HMRC, amount to be assessed by a costs judge if not agreed