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 Telement Limited ought to have known, and in fact had blind-eye knowledge amounting to constructive knowledge, that its transaction was connected to MTIC fraud due to numerous suspicious features and inadequate due diligence. This suffices to deny input tax deduction under VAT law.

Citation
[2010] UKFTT 470
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 / First Tier Tribunal Decision
Outcome
Appeal dismissed
Legal Topics
MTIC Fraud, Input Tax Deduction, Constructive Knowledge, Due Diligence, Balance of Probabilities
Tax Law VAT MTIC Fraud Input Tax Deduction Constructive Knowledge Due Diligence Balance of Probabilities

Case Brief

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Parties

Telement 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 that its transaction was connected to MTIC fraud
  2. 2 Whether blind-eye knowledge suffices for actual knowledge under VAT law

Ratio Decidendi

The Tribunal found that Telement Limited ought to have known, and in fact had blind-eye knowledge amounting to constructive knowledge, that its transaction was connected to MTIC fraud due to numerous suspicious features and inadequate due diligence. This suffices to deny input tax deduction under VAT law.

Court Disposition

Appeal dismissed

Orders

  • Appellant to pay HMRC’s costs of and incidental to the appeal on the standard basis by a tax judge