MFT Communications Ltd v Revenue & Customs [2014] UKFTT 248 (TC) (06 March 2014)

MFT Communications Ltd v Revenue & Customs [2014] UKFTT 248 (TC) (06 March 2014)

MFT, through its director, should have known the only reasonable explanation for the uncommercial nature of the transactions was their connection to MTIC fraud; therefore, HMRC was correct to deny recovery of input tax.

Citation
[2014] UKFTT 248 (TC)
Parties
Appellant: MFT Communications Limited; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
06 March 2014
Procedural Posture
VAT Appeal / First Tier Tribunal Decision
Outcome
Appeal dismissed
Legal Topics
MTIC Fraud, Input Tax Deduction, Due Diligence, VAT Repayment Claims
Tax Law VAT MTIC Fraud Input Tax Deduction Due Diligence VAT Repayment Claims

Case Brief

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Parties

MFT Communications Limited

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether MFT knew or should have known its transactions were connected to MTIC fraud
  2. 2 Whether MFT is entitled to recover input tax in relation to the disputed transactions

Ratio Decidendi

MFT, through its director, should have known the only reasonable explanation for the uncommercial nature of the transactions was their connection to MTIC fraud; therefore, HMRC was correct to deny recovery of input tax.

Court Disposition

Appeal dismissed

Orders

  • MFT to pay HMRC its costs of and incidental to the appeal, including bundle preparation and transcript provision.
  • Costs to be assessed in absence of agreement.