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Not such a scrappy defence

17 April 2013
Issue: 4399 / Categories: Tax cases , Investigations , VAT

Special Metals and Engineering Ltd (TC2362)

The taxpayer company was a scrap metal dealer who claimed repayment of input tax in respect of various business supplies.

HMRC refused the claim because they were not satisfied the transactions had taken place. Also the suppliers had deregistered for VAT making the invoices invalid.

The First-tier Tribunal said the taxpayer had registered for VAT and done everything that could be “reasonably” expected to ensure its suppliers were bona fide businesses.

The company’s managing director had a lot of experience in the scrap trade and kept records of transactions. He did not routinely check VAT numbers invoices but he had required a copy VAT registration certificate from each supplier since 2006.

The tribunal did not accept the Revenue’s assertion that it was necessary to be satisfied beyond reasonable doubt that the transactions had taken place: it was appropriate to make a decision on the balance of probabilities....

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