Hearsay evidence

The taxpayer bought doors and windows a UK company based in Northern Ireland. It provided an invoice and the taxpayer claimed the input tax.

He sold on the goods charging output VAT on the supply regardless of whether or not an invoice was issued.

HMRC claimed he bought the products by quoting a Republic of Ireland VAT number to the supplier enabling him to purchase them on a zero-rate basis.

The tax department used its powers under VATA 1994 s 73 to raise an assessment on the ground the taxpayer made off-record supplies to customers in Northern Ireland.

He denied the allegations and appealed.

The First-tier Tribunal noted the Revenue based its decision to a great extent on hearsay evidence. The judge said there were unresolved questions about what really happened but it was “not for the tribunal to speculate”.

He concluded that “the items...