VAT: Input tax claimed in respect of fictitious invoices
In Activ8 Alarms Ltd v HMRC (TC00361 – 17 February) a company reclaimed input tax of £86 625 in respect of the purported purchase of 500 alarms. HMRC formed the opinion that the relevant invoice had been manufactured by the company's controlling director (R). They imposed a penalty under VATA 1994 s 60 mitigated by 15% to take account of a degree of co-operation. The company appealed. The Tribunal reviewed the evidence in detail and dismissed the appeal finding that the invoice was a 'clumsy forgery' and that R had deliberately given evidence which he knew to be 'an untruth'. Hellier J observed that 'it was dishonest to seek an input tax credit for a supply which the appellant knew had not been made on the basis of a document which it must have known did not...
