In U Butt v HMRC [2019] EWCA Civ 554 (3 April 2019) the Court of Appeal found that it was permissible under EU law to apply a provision imposing a penalty by reference to case law which had widened the general scope of the provision.
HMRC had imposed a penalty on a company Waterfire after refusing a claim for input tax credit of £6 792 184 on the grounds that the company through its directors knew or ought to have known that the relevant transactions were connected with missing trader intra-Community (MTIC) fraud. Mr Butt was one of two directors of Waterfire and owned 50% of the shares in the company. Under VATA 1994 s 60 the penalty could be imposed on both the company and/or Mr Butt as its director.
It was accepted that s 60 is criminal in nature so that...
