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The taxpayer company traded in mobile telephones and central processing units. It claimed repayment of input tax in respect of various transactions involving goods, which had been imported into the UK and then exported by the taxpayer.
HMRC refused the claim on the grounds the transactions were connected with missing trader intra-community fraud (also known as carousel fraud).
The First-tier Tribunal accepted HMRC’s case that the fraud had occurred and the company should have known at the time it entered into the relevant transactions that they were connected to a fraudulent tax loss.
The company appealed.
The Upper Tribunal (Tax and Chancery Chamber) ruled the First-tier Tribunal had been entitled to reach its conclusion, in particular that the company knew the transactions were fraudulent.
The taxpayer company’s appeal was dismissed.
