Agent or principal?

The taxpayer was a sole trader who sourced cars from dealers in EU states for customers in the UK.

He also arranged the transfer of payments in euros for the vehicles on behalf of customers who he claimed collected the cars when they arrived in the UK. He accounted for VAT when registration documents were presented to the DVLA.

HMRC assessed the taxpayer for output tax on the basis he sold vehicles as principal to private customers. The department disallowed the taxpayer’s input tax claim on the basis there was no evidence to support his entitlement. His record-keeping was incomplete which meant the Revenue had to assess tax using its best judgment as under VATA 1994 s 73.

The taxpayer appealed claiming he acted as an agent as far as the deals were concerned. The dealers supplied the cars directly to the customers and...