DI & GI Electronics Ltd v Revenue & Customs [2011] UKFTT 825 (TC) (14 December 2011)

DI & GI Electronics Ltd v Revenue & Customs [2011] UKFTT 825 (TC) (14 December 2011)

The Tribunal found, on the balance of probabilities, that the appellant knew its transactions were connected with fraud. The circumstantial evidence, including the ease and speed of high-value deals, uniform mark-up, and lack of credible commercial explanation, established knowledge of fraud. Therefore, input tax deduction was denied under the Kittel principle.

Citation
[2011] UKFTT 825
Parties
Appellant: DI & GI Electronics Ltd; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
14 December 2011
Procedural Posture
VAT Input Tax Appeal (mtic Fraud) / First Tier Tribunal (tax), Final Decision
Outcome
Appeal dismissed
Legal Topics
VAT Fraud, MTIC (missing Trader Intra Community) Fraud, Input Tax Deduction, Contra Trading, Knowledge Test for Fraud, Kittel Principle
Tax Law European Union Law VAT Fraud MTIC (missing Trader Intra Community) Fraud Input Tax Deduction Contra Trading Knowledge Test for Fraud Kittel Principle

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Parties

DI & GI Electronics Ltd

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Input Tax Appeal (mtic Fraud) / First Tier Tribunal (tax), Final Decision

Legal Issues

  1. 1 Whether the appellant's transactions were connected with fraudulent evasion of VAT
  2. 2 Whether the appellant knew or should have known of the connection with fraud, thereby disqualifying input tax deduction

Ratio Decidendi

The Tribunal found, on the balance of probabilities, that the appellant knew its transactions were connected with fraud. The circumstantial evidence, including the ease and speed of high-value deals, uniform mark-up, and lack of credible commercial explanation, established knowledge of fraud. Therefore, input tax deduction was denied under the Kittel principle.

Court Disposition

Appeal dismissed

Orders

  • The appellant is not entitled to the input tax in question.
  • Any application for costs to be made within 42 days of the decision's release.