Butt v Revenue and Customs (VAT - denial of input tax - missing trader intra community fraud (MTIC)) [2026] UKFTT 623 (TC) (23 April 2026)

Butt v Revenue and Customs (VAT - denial of input tax - missing trader intra community fraud (MTIC)) [2026] UKFTT 623 (TC) (23 April 2026)

The Tribunal found that Mr Butt, as director and sole decision-maker of Quantum, knew or should have known that the transactions were connected to fraudulent evasion of VAT, based on the objective evidence of repeated tax loss letters, deregistration of suppliers, and the pattern of trading. The denial of input tax and imposition of penalties under sections 69C and 69D VAT Act 1994 were upheld.

Citation
[2026] UKFTT 623
Parties
Appellant: Rizwan Butt; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
23 April 2026
Procedural Posture
VAT Penalty Appeal / First Tier Tribunal (tax) Judgment
Outcome
Appeal dismissed
Legal Topics
Input Tax Denial, Missing Trader Intra Community Fraud (mtic), Director's Personal Liability, Section 69 C and 69 D VAT Act 1994, Kittel Principle
Tax Law VAT Law Fraud Input Tax Denial Missing Trader Intra Community Fraud (mtic) Director's Personal Liability Section 69 C and 69 D VAT Act 1994 Kittel Principle

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Parties

Rizwan Butt

Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

VAT Penalty Appeal / First Tier Tribunal (tax) Judgment

Legal Issues

  1. 1 Whether Mr Butt knew or should have known that Quantum's transactions were connected to fraudulent evasion of VAT
  2. 2 Whether HMRC correctly denied input tax and imposed penalties under sections 69C and 69D VAT Act 1994
  3. 3 Whether the underlying transactions were connected to MTIC fraud

Ratio Decidendi

The Tribunal found that Mr Butt, as director and sole decision-maker of Quantum, knew or should have known that the transactions were connected to fraudulent evasion of VAT, based on the objective evidence of repeated tax loss letters, deregistration of suppliers, and the pattern of trading. The denial of input tax and imposition of penalties under sections 69C and 69D VAT Act 1994 were upheld.

Court Disposition

Appeal dismissed

Orders

  • Mr Butt remains personally liable for the penalties imposed under section 69D VAT Act 1994 in the total sum of £52,450.91.