Evidence allowed

HMRC claimed the taxpayer company knew or should have known that transactions into which it entered were connected with the fraudulent evasion of VAT.

The transactions concerned mobile telephones with the chain of transactions beginning and ending with a Dubai-based company. The Netherland tax authority obtained computer records from a bank established in the Netherlands Antilles which revealed a number of transactions related to the taxpayer.

A copy of the records was sent to the Revenue upon receipt of a letter of request. The department then used those documents against the taxpayer company in the First-tier Tribunal.

The tribunal held that the evidence was admissible on the basis that HMRC had shown they had the consent of the Dutch authorities to use the information.

The taxpayer appealed.

The Upper Tribunal (Tax and Chancery Chamber) said the decision to admit the evidence was a case...