Evidence should be admitted

The taxpayer was a long-established family business that traded in electronic goods. HMRC denied its input tax repayment claims made in respect of three tax periods in 2006 on on the basis the relevant transactions were connected with missing trader intra-community fraud of which the taxpayer should have been aware.

The fraudulent trader SA was later convicted of fraud. The taxpayer appealed.

The Revenue sought to use evidence from the SA case against the taxpayer. The First-tier Tribunal decided the material was “very stale” that it would over-complicate the proceedings and – if allowed – significantly prejudice the taxpayer.

HMRC appealed to the Upper Tribunal which allowed the material to be admitted.

The case moved on the Court of Appeal which said the SA evidence related to the same period as that of the disputed transactions meaning it was not stale.

The...