Greener Solutions Ltd v Revenue & Customs [2010] UKFTT 412 (TC) (26 August 2010)

Greener Solutions Ltd v Revenue & Customs [2010] UKFTT 412 (TC) (26 August 2010)

The knowledge of Mr Murray/MBG that the transaction was connected to MTIC fraud is not attributable to the appellant company under the Hampshire Land exception, as Mr Murray was acting adversely to the company’s interests. The appellant’s directors and staff had no actual or constructive knowledge of the connection to fraud, and HMRC failed to prove that the appellant should have known of the connection. Therefore, the appellant is entitled to the input tax repayment.

Citation
[2010] UKFTT 412
Parties
Appellant: Greener Solutions Limited; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
26 August 2010
Procedural Posture
VAT Input Tax Appeal / First Tier Tribunal (tax), Substantive Judgment
Outcome
Appeal allowed
Legal Topics
VAT Fraud (mtic), Attribution of Knowledge to Companies, Input Tax Deduction, Kittel Principle, Hampshire Land Exception
Tax Law Company Law European Union Law VAT Fraud (mtic) Attribution of Knowledge to Companies Input Tax Deduction Kittel Principle Hampshire Land Exception

Case Brief

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Parties

Greener Solutions Limited

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Input Tax Appeal / First Tier Tribunal (tax), Substantive Judgment

Legal Issues

  1. 1 Whether the knowledge of an agent (Mr Murray/MBG) that a transaction was connected to MTIC fraud should be attributed to the appellant company for VAT purposes
  2. 2 Whether the appellant company should have known that its transaction was connected to VAT fraud

Ratio Decidendi

The knowledge of Mr Murray/MBG that the transaction was connected to MTIC fraud is not attributable to the appellant company under the Hampshire Land exception, as Mr Murray was acting adversely to the company’s interests. The appellant’s directors and staff had no actual or constructive knowledge of the connection to fraud, and HMRC failed to prove that the appellant should have known of the connection. Therefore, the appellant is entitled to the input tax repayment.

Court Disposition

Appeal allowed

Orders

  • HMRC’s decision not to repay input tax is set aside
  • Appellant is entitled to repayment of £176,346.10 input tax for period 11/06