Totel Distribution Ltd v Revenue & Customs [2011] UKFTT 217 (TC) (31 March 2011)

Totel Distribution Ltd v Revenue & Customs [2011] UKFTT 217 (TC) (31 March 2011)

The Tribunal found that the appellant, through its director Mr Rowbotham, both knew and ought to have known that its transactions were connected with VAT fraud. The evidence showed that the appellant traded with counterparties before receiving due diligence, relied on vague and inconsistent oral terms, and engaged in transactions that were objectively indicative of contrivance and fraud. The Tribunal concluded that the appellant was part of a cadre of traders who understood how the fraudulent system operated, and thus the input tax claims were properly refused.

Citation
[2011] UKFTT 217 (TC)
Parties
Appellant: Totel Distribution Ltd; Respondents: The Commissioners for Her Majesty’s Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
31 March 2011
Procedural Posture
VAT Appeal (first Tier Tribunal Tax) / Final Judgment After Full Hearing
Outcome
Appeal dismissed
Legal Topics
VAT Fraud, Input Tax Recovery, MTIC (missing Trader Intra Community) Fraud, Contra Trading, Knowledge Test for Input Tax Denial
Tax Law European Union Law VAT Fraud Input Tax Recovery MTIC (missing Trader Intra Community) Fraud Contra Trading Knowledge Test for Input Tax Denial

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 2 Authorities cited 5 Party arguments 2 Amounts and remedies 5
Sign in to unlock

Parties

Totel Distribution Ltd

Appellant

The Commissioners for Her Majesty’s Revenue and Customs

Respondents

Procedural Posture

VAT Appeal (first Tier Tribunal Tax) / Final Judgment After Full Hearing

Legal Issues

  1. 1 Whether the appellant's transactions were connected with the fraudulent evasion of VAT
  2. 2 Whether the appellant knew or should have known of that connection, thereby losing the right to input tax recovery

Ratio Decidendi

The Tribunal found that the appellant, through its director Mr Rowbotham, both knew and ought to have known that its transactions were connected with VAT fraud. The evidence showed that the appellant traded with counterparties before receiving due diligence, relied on vague and inconsistent oral terms, and engaged in transactions that were objectively indicative of contrivance and fraud. The Tribunal concluded that the appellant was part of a cadre of traders who understood how the fraudulent system operated, and thus the input tax claims were properly refused.

Court Disposition

Appeal dismissed

Orders

  • Input tax claims for the relevant periods refused
  • Right to apply for permission to appeal within 56 days