Azam v Revenue & Customs (VAT - PENALTIES : Evasion) [2015] UKFTT 188 (TC) (07 May 2015)

Azam v Revenue & Customs (VAT - PENALTIES : Evasion) [2015] UKFTT 188 (TC) (07 May 2015)

The Tribunal found that the appellant, as sole director, was aware of and responsible for the dishonest evasion of VAT by Easy Recruitment Services (UK) Limited. The evidence showed that the BCL invoices were fraudulent, there was no genuine subcontract, and the appellant's conduct amounted to at least reckless...

Source-derived case information.

Citation
[2015] UKFTT 188
Parties
Appellant: Mohammed Azam; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
07 May 2015
Procedural Posture
VAT Penalty Appeal / First Tier Tribunal (tax) Final Decision
Outcome
Appeal dismissed
Legal Topics
VAT Penalties, Dishonest Evasion, Attribution of Company Conduct, Personal Liability of Directors, Civil Evasion Penalty, Section 60 and 61 VATA 1994
Tax Law Administrative Law VAT Penalties Dishonest Evasion Attribution of Company Conduct Personal Liability of Directors Civil Evasion Penalty Section 60 and 61 VATA 1994

Source-derived case record

Summary, issues, holding and outcome

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Parties

Mohammed Azam

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Penalty Appeal / First Tier Tribunal (tax) Final Decision

Legal Issues

  1. 1 Whether the VAT penalty imposed on Easy Recruitment Services (UK) Limited is attributable to the dishonesty of the appellant under section 61 VATA 1994
  2. 2 Whether there was sufficient unclaimed input VAT to offset the unpaid output VAT
  3. 3 Whether the appellant's delegation of VAT affairs due to illiteracy constitutes a defence to dishonesty

Ratio Decidendi

The Tribunal found that the appellant, as sole director, was aware of and responsible for the dishonest evasion of VAT by Easy Recruitment Services (UK) Limited. The evidence showed that the BCL invoices were fraudulent, there was no genuine subcontract, and the appellant's conduct amounted to at least reckless disregard for VAT compliance. The penalty was properly imposed and recoverable from the appellant under section 61 VATA 1994.

Court Disposition

Appeal dismissed

Orders

  • The penalty of £111,349 imposed under section 60 VATA 1994 is upheld and recoverable from the appellant under section 61 VATA 1994.