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 its transactions were connected to fraudulent VAT losses. The evidence of circular payments, rapid transaction timings, consistent profit margins, and the context of MTIC warnings and due diligence requirements established actual or constructive knowledge. Due diligence, while relatively good, was insufficient to rebut HMRC's denial of input tax given the surrounding circumstances.

Citation
[2011] UKFTT 148 (TC)
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 / First Tier Tribunal (tax) Decision
Outcome
Appeal dismissed
Legal Topics
MTIC Fraud, Input Tax Denial, Due Diligence, Knowledge of Fraud
Tax Law VAT MTIC Fraud Input Tax Denial Due Diligence Knowledge of Fraud

Case Brief

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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 / First Tier Tribunal (tax) Decision

Legal Issues

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

Ratio Decidendi

The Tribunal found that, on the balance of probabilities, the Appellant knew or ought to have known its transactions were connected to fraudulent VAT losses. The evidence of circular payments, rapid transaction timings, consistent profit margins, and the context of MTIC warnings and due diligence requirements established actual or constructive knowledge. Due diligence, while relatively good, was insufficient to rebut HMRC's denial of input tax given the surrounding circumstances.

Court Disposition

Appeal dismissed

Orders

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