E-Tel (UK) Ltd v Revenue & Customs [2014] UKFTT 607 (TC) (19 June 2014)

E-Tel (UK) Ltd v Revenue & Customs [2014] UKFTT 607 (TC) (19 June 2014)

The Tribunal found that all the Appellant’s deals challenged on Kittel grounds were connected to fraudulent VAT losses, that the losses were fraudulent, and that the Appellant knew or ought to have known of the connection. The Appellant’s due diligence was superficial and did not amount to genuine protection against involvement in fraud. The appeal was dismissed.

Citation
[2014] UKFTT 607
Parties
Appellant: E-Tel (UK) Ltd; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
19 June 2014
Procedural Posture
VAT Appeal (mtic) / First Tier Tribunal (tax Chamber) Final Decision
Outcome
Appeal dismissed
Legal Topics
VAT Fraud, MTIC (missing Trader Intra Community) Fraud, Input Tax Denial, Output Tax Assessment, Kittel Principle, Due Diligence, Fraudulent VAT Losses
Tax Law European Union Law VAT Fraud MTIC (missing Trader Intra Community) Fraud Input Tax Denial Output Tax Assessment Kittel Principle Due Diligence +1 more

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Parties

E-Tel (UK) Ltd

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Appeal (mtic) / First Tier Tribunal (tax Chamber) Final Decision

Legal Issues

  1. 1 Whether the Appellant’s deals were connected to fraudulent VAT losses
  2. 2 Whether all VAT losses were fraudulent
  3. 3 Whether the Appellant knew or ought to have known of connections to fraudulent losses

Ratio Decidendi

The Tribunal found that all the Appellant’s deals challenged on Kittel grounds were connected to fraudulent VAT losses, that the losses were fraudulent, and that the Appellant knew or ought to have known of the connection. The Appellant’s due diligence was superficial and did not amount to genuine protection against involvement in fraud. The appeal was dismissed.

Court Disposition

Appeal dismissed

Orders

  • Input tax claims in respect of the 57 deals are denied.
  • Assessments to output tax in respect of 9 cash sales are upheld.