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Unreliable evidence

15 July 2014
Issue: 4460 / Categories: Tax cases , VAT

KC Noble v CRC, Upper Tribunal (Tax and Chancery Division)

The taxpayer installed suspended ceilings on large building projects as a sole trader under the name K&B Ceilings.

He registered for VAT with effect from November 2002 and claimed input tax of £209 504 on his returns for the accounting periods April 2003 to April 2005.

HMRC questioned the figure and the taxpayer produced 178 invoices headed HB Interiors as evidence he had incurred VAT on services of labourers supplied to him by B who traded as HB Interiors.

B registered for VAT but never submitted a VAT return or accounted for VAT. The Revenue deregistered him in December 2003 with effect from December 2002.

The tax department decided B had not supplied the services shown on the invoices which were not VAT invoices because they did not comply with the VAT Regulations 1995 SI 1995/2518. The taxpayer was not entitled to deduct...

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