Mayfair Executive Ltd v Revenue & Customs [2011] UKFTT 148 (TC) (01 March 2011)

Mayfair Executive Ltd v Revenue & Customs [2011] UKFTT 148 (TC) (01 March 2011)

The Tribunal found that, on the balance of probabilities, the Appellant knew or ought to have known that its transactions were connected to fraudulent VAT losses. Despite good due diligence, the pattern of trading, rapid circular payments, consistent profit margins, and other features indicated actual or constructive knowledge of fraud. The Respondents met the burden of proof to deny input tax recovery.

Citation
[2011] UKFTT 148
Parties
Appellant: Mayfair Executive Limited; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
01 March 2011
Procedural Posture
VAT Input Tax Appeal / Final Judgment at First Tier Tribunal (tax)
Outcome
Appeal dismissed
Legal Topics
MTIC Fraud, Input Tax Recovery, Due Diligence, Knowledge of Fraud
Tax Law VAT MTIC Fraud Input Tax Recovery Due Diligence Knowledge of Fraud

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Parties

Mayfair Executive Limited

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

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

Legal Issues

  1. 1 Whether the Appellant knew or ought to have known that its transactions were connected to fraudulent VAT losses
  2. 2 Whether due diligence undertaken by the Appellant was sufficient to rebut HMRC's denial of input tax recovery

Ratio Decidendi

The Tribunal found that, on the balance of probabilities, the Appellant knew or ought to have known that its transactions were connected to fraudulent VAT losses. Despite good due diligence, the pattern of trading, rapid circular payments, consistent profit margins, and other features indicated actual or constructive knowledge of fraud. The Respondents met the burden of proof to deny input tax recovery.

Court Disposition

Appeal dismissed

Orders

  • Input tax claim of £1,998,640 denied
  • No VAT repayment to Appellant