Phonepoint Communications Ltd v Revenue & Customs [2010] UKFTT 452 (TC) (28 September 2010)

Phonepoint Communications Ltd v Revenue & Customs [2010] UKFTT 452 (TC) (28 September 2010)

The tribunal found that each deal chain was implemented with a view to defrauding HMRC of VAT, and that Phonepoint Communications Limited either knew or should have known its transactions were connected to fraudulent evasion of VAT, thus disentitling it to repayment of input tax.

Source-derived case information.

Citation
[2010] UKFTT 452
Parties
Appellant: Phonepoint Communications Limited; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
28 September 2010
Procedural Posture
VAT Input Tax Appeal / First Tier Tribunal Decision
Outcome
Appeal dismissed
Legal Topics
MTIC Fraud, Input Tax Deduction, Kittel Test, Due Diligence, Constructive Knowledge
Tax Law VAT Fraud MTIC Fraud Input Tax Deduction Kittel Test Due Diligence Constructive Knowledge

Source-derived case record

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Parties

Phonepoint Communications Limited

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Input Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether the Appellant knew or ought to have known its transactions were connected to fraudulent evasion of VAT
  2. 2 Whether HMRC suffered a VAT loss traceable to a defaulting trader in the chain
  3. 3 Whether the Appellant is entitled to repayment of input VAT

Ratio Decidendi

The tribunal found that each deal chain was implemented with a view to defrauding HMRC of VAT, and that Phonepoint Communications Limited either knew or should have known its transactions were connected to fraudulent evasion of VAT, thus disentitling it to repayment of input tax.

Court Disposition

Appeal dismissed

Orders

  • HMRC's refusal to repay input VAT is upheld
  • Phonepoint Communications Limited is not entitled to repayment of input tax for periods 06/06 and 07/06