Fusion Electronics Ltd v Revenue & Customs [2011] UKFTT 529 (TC) (05 August 2011)

Fusion Electronics Ltd's transactions were connected to fraudulent VAT losses, and Fusion knew or should have known of this connection. The evidence established that the input tax claims were part of a scheme to defraud the revenue. Therefore, Fusion forfeited the right to deduct input tax under EU and UK law.

Citation: [2011] UKFTT 529
Parties: Appellant: Fusion Electronics Ltd; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction: United Kingdom
Judgment Date: 05 August 2011
Procedural Posture: VAT Input Tax Appeal / Final Judgment at First Tier Tribunal (tax Chamber)
Outcome: Appeal dismissed
Legal Topics: VAT Fraud, MTIC Fraud, Input Tax Deduction, Abuse of Rights, Due Diligence, Contra Trading

Tax Law European Union Law VAT Fraud MTIC Fraud Input Tax Deduction Abuse of Rights Due Diligence Contra Trading

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Parties

Fusion Electronics Ltd

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

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

Legal Issues

1 Whether Fusion Electronics Ltd was entitled to deduct input tax under VAT law
2 Whether Fusion's transactions were connected to fraudulent evasion of VAT
3 Whether Fusion knew or should have known of the connection to fraud

Ratio Decidendi

Court Disposition

Appeal dismissed

Orders

Fusion Electronics Ltd is denied the right to deduct input tax for the periods 04/06 and 05/06.
Fusion must refund input tax of £1,464.44 repaid by the Commissioners in the same periods.