Butt v Revenue & Customs [2014] UKFTT 490 (TC) (20 May 2014)

Butt v Revenue & Customs [2014] UKFTT 490 (TC) (20 May 2014)

HMRC’s case is based on established statutory and case law principles that allow for the imposition of a penalty under section 61 VATA 1994 where a company, through its director’s dishonesty, seeks to obtain a VAT credit to which it is not entitled due to participation in fraud. The relevant legal principles pre-dated the conduct in question, and the penalty does not breach ECHR or EU Charter protections against retrospective criminalisation, disproportionate punishment, or double jeopardy. The Appellant’s application for summary judgment is refused as HMRC’s case has a reasonable prospect of success.

Citation
[2014] UKFTT 490
Parties
Appellant: Umaad Butt; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
20 May 2014
Procedural Posture
VAT Penalty Appeal (first Tier Tribunal, Tax Chamber) / Summary Judgment Application by Appellant Against Penalty Under Section 61 VATA 1994
Outcome
Application for summary judgment refused; HMRC not barred from further participation.
Legal Topics
VAT Penalties, Tax Evasion, Director Liability, Retrospective Criminalisation, Right to Deduct Input Tax, Proportionality of Penalties, Double Jeopardy, Interpretation of EU Law in UK Tax Context
Tax Law European Law Human Rights Law VAT Penalties Tax Evasion Director Liability Retrospective Criminalisation Right to Deduct Input Tax +3 more

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Parties

Umaad Butt

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

VAT Penalty Appeal (first Tier Tribunal, Tax Chamber) / Summary Judgment Application by Appellant Against Penalty Under Section 61 VATA 1994

Legal Issues

  1. 1 Whether HMRC had legal power to impose a penalty under section 61 VATA 1994 on the Appellant based on the facts alleged
  2. 2 Whether the penalty power is restricted by the ECHR or EU Charter (retrospective criminalisation, proportionality, double jeopardy)
  3. 3 Whether Waterfire Ltd’s conduct constituted VAT evasion and dishonesty under section 60 VATA 1994

Ratio Decidendi

HMRC’s case is based on established statutory and case law principles that allow for the imposition of a penalty under section 61 VATA 1994 where a company, through its director’s dishonesty, seeks to obtain a VAT credit to which it is not entitled due to participation in fraud. The relevant legal principles pre-dated the conduct in question, and the penalty does not breach ECHR or EU Charter protections against retrospective criminalisation, disproportionate punishment, or double jeopardy. The Appellant’s application for summary judgment is refused as HMRC’s case has a reasonable prospect of success.

Court Disposition

Application for summary judgment refused; HMRC not barred from further participation.

Orders

  • Appellant’s application for summary determination is refused.
  • Proceedings to continue to substantive hearing.