Pars Technology Ltd v Revenue & Customs [2011] UKFTT 9 (TC) (15 December 2010)

Pars Technology Ltd v Revenue & Customs [2011] UKFTT 9 (TC) (15 December 2010)

The Tribunal found that Pars Technology Ltd's transactions were connected to fraudulent evasion of VAT and that Pars knew or should have known of this connection. Applying the Kittel principle as affirmed in Mobilx, the right to deduct input tax is lost in full where such knowledge or means of knowledge is established. HMRC met the burden of proof, and the denial of input tax recovery was lawful.

Citation
[2011] UKFTT 9
Parties
Appellant: Pars Technology Ltd; Respondent: HM Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
15 December 2010
Procedural Posture
VAT Input Tax Appeal / Final Judgment at First Tier Tribunal (tax)
Outcome
Appeal dismissed
Legal Topics
VAT, MTIC Fraud, Input Tax Deduction, Fraudulent Evasion of VAT, Burden of Proof, Knowledge and Means of Knowledge, Fiscal Neutrality, Legal Certainty
Tax Law European Union Law VAT MTIC Fraud Input Tax Deduction Fraudulent Evasion of VAT Burden of Proof Knowledge and Means of Knowledge +2 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 5 Authorities cited 11 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Pars Technology Ltd

Appellant

HM Revenue & Customs

Respondent

Procedural Posture

VAT Input Tax Appeal / Final Judgment at First Tier Tribunal (tax)

Legal Issues

  1. 1 Whether Pars Technology Ltd's transactions were connected with fraudulent evasion of VAT
  2. 2 Whether Pars Technology Ltd knew or should have known of the connection to fraud
  3. 3 Whether HMRC's denial of input tax recovery was lawful under the Kittel principle

Ratio Decidendi

The Tribunal found that Pars Technology Ltd's transactions were connected to fraudulent evasion of VAT and that Pars knew or should have known of this connection. Applying the Kittel principle as affirmed in Mobilx, the right to deduct input tax is lost in full where such knowledge or means of knowledge is established. HMRC met the burden of proof, and the denial of input tax recovery was lawful.

Court Disposition

Appeal dismissed

Orders

  • HMRC's denial of input tax recovery for April and May 2006 is upheld
  • Pars Technology Ltd is not entitled to recover input tax for the relevant transactions