Digit Three Ltd v Revenue & Customs [2013] UKFTT 288 (TC) (03 May 2013)

Digit Three Ltd v Revenue & Customs [2013] UKFTT 288 (TC) (03 May 2013)

The Tribunal found that the July 2006 transactions were connected with the fraudulent evasion of VAT, as V2 UK Limited intended to default on its VAT liability as part of a wider fraudulent scheme. The Tribunal further found that Mr Titheridge, as DTL's director, knew or should have known that all the disputed transactions (June and July 2006) were connected with the fraudulent evasion of VAT. Accordingly, DTL was not entitled to deduct input tax on those transactions.

Citation
[2013] UKFTT 288
Parties
Appellant: Digit Three Limited; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
03 May 2013
Procedural Posture
VAT Input Tax Appeal (mtic Fraud) / First Tier Tribunal (tax Chamber) Final Judgment
Outcome
Appeal dismissed
Legal Topics
VAT Fraud, Input Tax Deduction, MTIC (missing Trader Intra Community) Fraud, Constructive Knowledge, Burden of Proof, Right to Deduct Input Tax
Tax Law European Union Law VAT Fraud Input Tax Deduction MTIC (missing Trader Intra Community) Fraud Constructive Knowledge Burden of Proof Right to Deduct Input Tax

Case Brief

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Parties

Digit Three Limited

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Input Tax Appeal (mtic Fraud) / First Tier Tribunal (tax Chamber) Final Judgment

Legal Issues

  1. 1 Whether the July 2006 transactions were connected with the fraudulent evasion of VAT
  2. 2 Whether Mr Titheridge (DTL) knew or should have known that the transactions in June and July 2006 were connected with the fraudulent evasion of VAT

Ratio Decidendi

The Tribunal found that the July 2006 transactions were connected with the fraudulent evasion of VAT, as V2 UK Limited intended to default on its VAT liability as part of a wider fraudulent scheme. The Tribunal further found that Mr Titheridge, as DTL's director, knew or should have known that all the disputed transactions (June and July 2006) were connected with the fraudulent evasion of VAT. Accordingly, DTL was not entitled to deduct input tax on those transactions.

Court Disposition

Appeal dismissed

Orders

  • DTL’s appeal against HMRC’s refusal to repay input tax is dismissed.