Intekx Ltd v Revenue & Customs [2014] UKFTT 277 (TC) (21 March 2014)

Intekx Ltd v Revenue & Customs [2014] UKFTT 277 (TC) (21 March 2014)

The Tribunal found, on the balance of probabilities, that Intekx either knew or ought to have known that its transactions were connected with the fraudulent evasion of VAT. The due diligence performed was inadequate, the supply chains were inherently suspicious, and objective evidence demonstrated that Intekx was a participant in an overall fraudulent scheme. Accordingly, Intekx was not entitled to deduct the input tax claimed.

Citation
[2014] UKFTT 277
Parties
Appellant: Intekx Limited; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
21 March 2014
Procedural Posture
VAT Input Tax Appeal (first Tier Tribunal Tax Chamber) / Final Judgment After Full Hearing
Outcome
Appeal dismissed
Legal Topics
VAT Fraud, Input Tax Deduction, MTIC (missing Trader Intra Community) Fraud, Contra Trading, Knowledge Requirement for Denial of Input Tax, Due Diligence in VAT Chains
Tax Law European Union Law VAT Fraud Input Tax Deduction MTIC (missing Trader Intra Community) Fraud Contra Trading Knowledge Requirement for Denial of Input Tax Due Diligence in VAT Chains

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Parties

Intekx Limited

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Input Tax Appeal (first Tier Tribunal Tax Chamber) / Final Judgment After Full Hearing

Legal Issues

  1. 1 Whether Intekx knew its transactions were connected to fraudulent tax loss
  2. 2 Whether Intekx ought to have known its transactions were connected to fraudulent tax loss

Ratio Decidendi

The Tribunal found, on the balance of probabilities, that Intekx either knew or ought to have known that its transactions were connected with the fraudulent evasion of VAT. The due diligence performed was inadequate, the supply chains were inherently suspicious, and objective evidence demonstrated that Intekx was a participant in an overall fraudulent scheme. Accordingly, Intekx was not entitled to deduct the input tax claimed.

Court Disposition

Appeal dismissed

Orders

  • Entitlement to deduct input tax in the sum of £176,487.50 is denied to Intekx Limited.
  • No further orders as to costs or directions.