Mochars Ltd v Revenue and Customs (VAT repayment; claim made in absence of valid VAT invoices; some invoices subsequently obtained; exercise of discretion under regulation 29(2) of VAT Regulations; is there a need to alert taxpayer to alternative evidence; Lucky Technology considered) [2026] UKFTT 313 (TC) (20 February 2026)

Parties

Procedural Posture

VAT Repayment Appeal / First Tier Tribunal (tax Chamber) Judgment

Legal Issues

1. 1 Whether HMRC was required to alert the taxpayer to the possibility of providing alternative evidence under regulation 29(2) of the VAT Regulations
2. 2 Whether HMRC properly exercised its discretion under regulation 29(2) in refusing input tax claims where no invoices or alternative evidence were provided

Ratio Decidendi

HMRC was not under a legal obligation to alert the taxpayer to the possibility of providing alternative evidence under regulation 29(2). The officer considered exercising discretion but, in the absence of any corroborative evidence for the 24 transactions despite repeated requests, it was reasonable to refuse the input tax claims. There was no error in HMRC's approach.

Court Disposition

Appeal dismissed

Orders

• VAT repayment claim for the 12/23 period reduced from £29,394.80 to £76.00
• No input tax allowed for the 24 transactions lacking invoices or alternative evidence