Mobile Sourcing Ltd v Revenue & Customs [2014] UKFTT 1089 (TC) (08 December 2014)

Mobile Sourcing Ltd v Revenue & Customs [2014] UKFTT 1089 (TC) (08 December 2014)

The Tribunal held that the fraud exception does not apply because the fraudulent acts of WIGIG against MSL (bank account withdrawals) were not directly related to the Disputed VAT Transactions. There was no sufficient nexus between the agent’s fraud and the VAT transactions in question. Therefore, WIGIG’s knowledge of the VAT fraud is imputed to MSL, and the input tax denial stands.

Citation
[2014] UKFTT 1089
Parties
Appellant: Mobile Sourcing Ltd; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
08 December 2014
Procedural Posture
VAT Input Tax Appeal (mtic Fraud) / Preliminary Hearing on Fraud Exception and Attribution of Agent's Knowledge
Outcome
Appeal dismissed
Legal Topics
VAT Fraud, Input Tax Denial, Attribution of Knowledge, Fraud Exception for Agents, Constructive Knowledge, Agency Liability
Tax Law Agency Law European Union Law VAT Fraud Input Tax Denial Attribution of Knowledge Fraud Exception for Agents Constructive Knowledge +1 more

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Parties

Mobile Sourcing Ltd

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Input Tax Appeal (mtic Fraud) / Preliminary Hearing on Fraud Exception and Attribution of Agent's Knowledge

Legal Issues

  1. 1 Whether the fraudulent knowledge of MSL’s agent WIGIG regarding VAT fraud should be imputed to MSL for the Disputed VAT Trades
  2. 2 Whether the 'fraud exception' applies to prevent attribution of WIGIG’s knowledge to MSL in the context of the Disputed VAT Trades

Ratio Decidendi

The Tribunal held that the fraud exception does not apply because the fraudulent acts of WIGIG against MSL (bank account withdrawals) were not directly related to the Disputed VAT Transactions. There was no sufficient nexus between the agent’s fraud and the VAT transactions in question. Therefore, WIGIG’s knowledge of the VAT fraud is imputed to MSL, and the input tax denial stands.

Court Disposition

Appeal dismissed

Orders

  • MSL’s appeal against HMRC’s decision to deny input tax for the 04/06 period is dismissed.