Infinity Distribution Ltd (In Administration) v Revenue and Customs (VAT - APPEALS : Other) [2018] UKFTT 249 (TC) (01 May 2018)

Infinity Distribution Ltd (In Administration) v Revenue and Customs (VAT - APPEALS : Other) [2018] UKFTT 249 (TC) (01 May 2018)

For the Invalid Invoice Claims, the Tribunal held that under binding ECJ authority, where the taxpayer had no actual or constructive knowledge of fraud and held invoices in the prescribed form, input tax deduction cannot be denied even if the goods did not exist. The Respondents' failure to plead knowledge was...

Source-derived case information.

Citation
[2018] UKFTT 249 (TC)
Parties
Appellant: Infinity Distribution Limited (In Administration); Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
01 May 2018
Procedural Posture
VAT Appeal / Interlocutory Directions and Partial Summary Determination
Outcome
Partial summary determination; directions for further conduct of remaining claims.
Legal Topics
VAT Input Tax Deduction, Invalid Invoices, Zero Rating of Exports, Burden of Proof in VAT Fraud, ECJ Authority and Primacy, Tribunal Procedure
Tax Law European Union Law VAT Input Tax Deduction Invalid Invoices Zero Rating of Exports Burden of Proof in VAT Fraud ECJ Authority and Primacy Tribunal Procedure

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Summary, issues, holding and outcome

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Parties

Infinity Distribution Limited (In Administration)

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Appeal / Interlocutory Directions and Partial Summary Determination

Legal Issues

  1. 1 Whether HMRC can deny input tax deduction based on invoices relating to non-existent goods where the taxpayer had no actual or constructive knowledge of fraud (Invalid Invoice Claims)
  2. 2 Whether the Appellant is entitled to zero-rating for exports where there is insufficient evidence of export and alleged fraud, but no allegation of actual or constructive knowledge against the Appellant (Export Claims)

Ratio Decidendi

For the Invalid Invoice Claims, the Tribunal held that under binding ECJ authority, where the taxpayer had no actual or constructive knowledge of fraud and held invoices in the prescribed form, input tax deduction cannot be denied even if the goods did not exist. The Respondents' failure to plead knowledge was fatal, and the appeals were summarily determined in favour of the Appellant. For the Export Claims, the Tribunal held that the matter must proceed to a full hearing as the factual issues regarding export and the Appellant's knowledge or measures taken remained unresolved.

Court Disposition

Partial summary determination; directions for further conduct of remaining claims.

Orders

  • Respondents barred from further participation in the Invalid Invoice Claims; those appeals summarily determined in favour of the Appellant.
  • Appellant's application to bar Respondents and summarily determine the Export Claims is dismissed; those appeals to proceed to full hearing.