Fraudulent transactions

Upper Tribunal’s consideration of the evidence

The taxpayer reclaimed input tax on the purchase of mobile telephones. HMRC rejected the claims on the basis that the transactions were connected to missing trader intra-community fraud.

The First-tier Tribunal accepted the taxpayer’s argument that it did not know and could not reasonably be expected to have known that the transactions had been connected with fraud.

The Upper Tribunal concluded that the First-tier Tribunal had made errors in law in reaching its decision and said the case should be remitted to the lower court. The taxpayer CCA appealed. It said the Upper Tribunal had failed to take into account a criminal investigation into the VAT frauds that had not involved CCA and its controlling director. Further it should have found that the First-tier Tribunal had approached the circumstantial evidence in the wrong way.

The Court of Appeal disagreed...