TC09617 - [2025] UKFTT 01018 (TC)

On 21 April 2022, HMRC wrote to Deos stating that HMRC were concerned that Deos could be at risk of involvement in supply chains connected with fraud and that this could potentially lead to Deos being unable to recover input tax it incurred; a meeting was proposed, to discuss Deos’ business activities and VAT records, at which HMRC could explain “ways to spot missing trader fraud” to assist Deos “in avoiding becoming involved in supply chains that could be linked to MTIC fraud”.

On 25 May 2022 HMRC wrote to Deos informing it that they would be checking the company’s 04/22 VAT return; the letter said that HMRC’s checks looked at the risk to the UK of MTIC fraud and VAT supply chain fraud. A similar letter in respect of 05/22 was sent on 20 June 2022.

On 5 August 2022, HMRC sent Deos two ‘tax loss’ letters (i.e. letters stating that HMRC, following enquiries, now knew that certain transactions commenced with a ‘defaulting trader’) covering transactions with Thames in the 04/21, 06/21 and 08/21 VAT periods. Similar letters were sent on 30 November 2022 in respect of Estanza and the 04/22 and 05/22 VAT periods.