Telement Ltd v Revenue & Customs [2010] UKFTT 470 (TC) (06 October 2010)

Telement Ltd v Revenue & Customs [2010] UKFTT 470 (TC) (06 October 2010)

The Tribunal found that the Appellant, through a combination of inadequate due diligence, failure to investigate suspicious features, and blind-eye conduct, ought to have known that the only reasonable explanation for the transaction was its connection to fraudulent VAT evasion. This met the legal test for denial of input tax deduction under Kittel and Mobilx.

Citation
[2010] UKFTT 470 (TC)
Parties
Appellant: Telement Limited; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
06 October 2010
Procedural Posture
VAT Input Tax Appeal (mtic Fraud) / First Tier Tribunal (tax), Final Decision
Outcome
Appeal dismissed
Legal Topics
Input Tax Deduction, MTIC Fraud, Constructive Knowledge, Due Diligence, Balance of Probabilities
Tax Law VAT Law Fraud Input Tax Deduction MTIC Fraud Constructive Knowledge Due Diligence Balance of Probabilities

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Parties

Telement Limited

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Input Tax Appeal (mtic Fraud) / First Tier Tribunal (tax), Final Decision

Legal Issues

  1. 1 Whether the Appellant knew or ought to have known that its transaction was connected with MTIC fraud and thus was not entitled to input tax deduction

Ratio Decidendi

The Tribunal found that the Appellant, through a combination of inadequate due diligence, failure to investigate suspicious features, and blind-eye conduct, ought to have known that the only reasonable explanation for the transaction was its connection to fraudulent VAT evasion. This met the legal test for denial of input tax deduction under Kittel and Mobilx.

Court Disposition

Appeal dismissed

Orders

  • Appellant to pay HMRC’s costs of and incidental to the appeal, to be determined in default of agreement on the standard basis by a tax judge.