Lacking awareness

The taxpayer company bought mobile phones in two transactions during July 2006 and claimed a refund of input tax.

HMRC refused the claim on the basis the purchases were connected with missing trader intra-community fraud and that the taxpayer knew or should have known about the fraud.

The First-tier Tribunal (FTT) dismissed the taxpayer’s appeal finding that the taxpayer should have known about the fraudulent evasion of VAT and refusing the company’s application that a reference be made to the Court of Justice of the European Union.

The taxpayer appealed to the Upper Tribunal where it argued that the FTT should have found the business was entitled to claim as input tax the VAT paid in relation to the transactions.

The Upper Tribunal said the FTT had identified the legal principles correctly and directed itself properly with regard to the law when deciding the case. It...