Regent Commodities Ltd v Revenue & Customs [2010] UKFTT 68 (TC) (12 February 2010)

Regent Commodities Ltd v Revenue & Customs [2010] UKFTT 68 (TC) (12 February 2010)

The Tribunal found that there were fraudulent tax losses in the deal chains of the alleged contra-traders, that Regent's transactions were connected to those losses, and that Regent, through its director, knew or should have known of the connection to fraudulent tax losses. The Tribunal applied the principles from Kittel and related authorities, holding that Regent either had actual or constructive knowledge that its transactions were connected with VAT fraud, and thus was not entitled to the input tax repayment claimed.

Citation
[2010] UKFTT 68 (TC)
Parties
Appellant: Regent Commodities Ltd; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
12 February 2010
Procedural Posture
VAT Input Tax Repayment Appeal / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal dismissed
Legal Topics
VAT Fraud, Input Tax Deduction, MTIC Fraud, Contra Trading, Knowledge Requirement for Denial of Input Tax, Constructive Knowledge in VAT Fraud
Tax Law European Union Law VAT Fraud Input Tax Deduction MTIC Fraud Contra Trading Knowledge Requirement for Denial of Input Tax Constructive Knowledge in VAT Fraud

Case Brief

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Parties

Regent Commodities Ltd

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Input Tax Repayment Appeal / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether there were fraudulent tax losses in the deal chains of the alleged contra-traders
  2. 2 Whether Regent's transactions were connected to those fraudulent tax losses
  3. 3 Whether Regent knew or should have known of the connection to fraudulent tax losses

Ratio Decidendi

The Tribunal found that there were fraudulent tax losses in the deal chains of the alleged contra-traders, that Regent's transactions were connected to those losses, and that Regent, through its director, knew or should have known of the connection to fraudulent tax losses. The Tribunal applied the principles from Kittel and related authorities, holding that Regent either had actual or constructive knowledge that its transactions were connected with VAT fraud, and thus was not entitled to the input tax repayment claimed.

Court Disposition

Appeal dismissed

Orders

  • Input tax repayment claim in the sum of £2,107,822.50 is denied to Regent Commodities Ltd.