VAT: MTIC fraud
The CA has delivered an important judgment concerning MTIC fraud in four cases which it heard together. HMRC was successful in three of the cases but were unsuccessful in the case of HMRC v Blue Sphere Global Ltd (No 2) (CA – 12 May). A company (B) claimed an input tax repayment of more than £1 000 000 relating to transactions in mobile telephones. HMRC rejected the claim on the grounds that B ought to have known that the relevant transactions were connected to MTIC fraud.
B appealed contending that it had carried out adequate 'due diligence' on its supplier. The Tribunal rejected this contention finding that B's due diligence 'was not rigorous copious or comprehensive'. However the Ch D allowed B's appeal and the CA upheld this decision.
Moses LJ held that 'the Tribunal's findings were insufficient to establish that...
