Who supplied what?

VAT liability of sale of silver ingots

The taxpayer’s main activity was to renovate engines for road vehicles but the appeal concerned two sales of ‘silver ingots’ for £360 374 to M Ltd. On the basis of two invoices apparently from the taxpayer to M HMRC assessed the proceeds to VAT using its powers of ‘best judgement’ under VATA 1994 s 73(1).

The background to the case was confusing. The director (R) of the taxpayer said he had agreed to sell the shares in his company for £5 000 to H. Soon after their meeting but before the deal was agreed a large package of silver arrived at the company’s premises. R insisted it was removed saying H could not treat the premises as his own until the deal was completed. Two receipts for £177 660 and £182 714 later appeared in the taxpayer’s...