TC09617 - [2025] UKFTT 01018 (TC)

in November 2021, Mr Smith was asking his RCS contact if she had heard of Flashtech. In her response, the RCS contact said that they were “big big big liars” and also “deep in VAT fraud”;

on 1 December 2021, the RCS contact informed Mr Smith that in every shipment Deos had made to RCS, a small quantity of fakes had been inserted; Mr Smith’s reaction to this was to express anger; the RCS contact said she did not blame Deos, or its supplier but she thought it was “before that one”; Mr Smith said that he was going to ask for Deos’ money back, so Deos could pay back RCS; but he said he did not want to ask “now”;

on 7 December 2021, Mr Smith was saying to his RCS contact that he was trying to reach his supplier, without success; he said it was “bloody strange” and that he just hoped his supplier had not “done a runner with all the VAT I paid him”;

on 8 December 2021 Mr Smith was indicating to his RCS contact that he was trying to get hold of his supplier’s supplier;

on 4 January 2022 Mr Smith told his RCS contact that his best supplier was not his best supplier as he was a “crook”; the supplier had “done a bunk with millions worth of VAT”; Mr Smith said he would probably now have an investigation, which was “fine” as he had “done everything by the book”;

on 13 January 2022 Mr Smith told his RCS contact that “another supplier of mine is bent”; he explained that “bent” meant “a VAT fraud”; Mr Smith explained in cross examination that he was referring here to Thames, which had had a visit from HMRC in December 2021; Mr Smith also told his RCS contact that he was now finding good suppliers that pay their taxes, as “otherwise the tax man comes after me”. He said that the reason RCS had so much stock from Deos was that Deos’ supplier “was selling everything at a loss but keeping the VAT, which is 20%, so he had done a bunk with about 10 million pounds worth of tax”;

in March 2022, when the RCS contact observed that Deos’ prices were much higher than in January, Mr Smith responded: “that’s because my last supplier was a crook and was not paying his VAT”;

in April 2022, as part of a price negotiation dialogue, Mr Smith again said that his “last supplier” was “bent”.