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Aware of the connection

17 November 2015
Issue: 4527 / Categories: Tax cases , VAT

Excel RTI Solutions Ltd v CRC, Upper Tribunal (Tax and Chancery Chamber), 21 October 2015 

The taxpayer imported and exported mobile phones. HMRC said some of the transactions involved VAT fraud and the taxpayer’s managing director knew or should have known about it.

The First-tier Tribunal concluded that the relevant transactions were connected with the fraudulent evasion of VAT and the taxpayer knew about the connection.

The taxpayer appealed.

In the Upper Tribunal the Hon Mr Justice Barling found the First-tier Tribunal had been correct to approach the case on the basis that HMRC must establish knowledge on the balance of probabilities. He said EU law made no provision for a specific EU standard of proof other than objective evidence was necessary. The First-tier Tribunal had not erred in law.

Further the decision was not perverse. The First-tier Tribunal had been presented with objective evidence from which it was entitled to conclude that the director of the taxpayer knew the transactions were...

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