Fraudulent deals

The taxpayer company was involved in transactions by which it acted as the broker in the purchase and sale of mobile phones.

The firm bought goods from VAT-registered traders in the UK and sold them to VAT-registered businesses in other EU states.

The taxpayer claimed repayment of input tax in respect of the deals – but HMRC refused on the grounds the taxpayer was connected with missing trader intra-community fraud (MTICF).

The First-tier Tribunal (FTT) dismissed the company’s appeal: the firm should have known its transactions were connected with a scam.

The taxpayer appealed again claiming the FTT had concluded incorrectly that the business had agreed with the Revenue that MTICF had taken place; there was insufficient evidence to show the company should have realised the transactions were deceitful.

The Upper Tribunal agreed the FTT was wrong to have ruled that the taxpayer accepted proof of the existence of...