TC09640 - [2025] UKFTT 01114 (TC)

Fecha: 13-Jun-2025

HMRC’s challenges to the documents

HMRC’s challenges to the documents

146.

HMRC levelled many challenges to the documents. They started by inviting us to note the importance of probative documents as explained by the Court of Appeal in Mainpay:

“61 …
(iii)
… The analysis of what is being supplied depends, in any given case, on economic realities of the transaction, that being a “fundamental criterion” for the application of the common system of VAT …; The contracts are the most useful starting point in that exercise but not necessarily the endpoint; …”

147.

HMRC emphasised that they had, over the life of this appeal, systematically and consistently maintained a position that the Appellant’s disclosure had failed to adequately demonstrate that it had incorrectly been charged VAT. It had failed to demonstrate the receipt of supplies eligible to be exempted from VAT and on which VAT had otherwise been declared.

148.

In response to a question from the Tribunal, HMRC confirmed however that they did not dispute that VAT had been collected as shown on invoices which had been scheduled and provided to them by the Appellant (including the invoices described at paragraphs 136 and 143 above).

149.

HMRC contended that, on the documents presented by the Appellant as sample transactions, the Tribunal could not be confident that there had been a supply of a “deputy” because the contractual documentation was incomplete and/or unsigned and there was no evidence that workers described variously as locums or temporary workers were deputising or acting as deputies.

150.

Not unsurprisingly, HMRC had prepared their criticism of the documentation in advance of the hearing (and without reference to the clip which was produced overnight between days 1 and 2 of the hearing). We note below HMRC’s specific criticisms of the documents in the bundle, identifying where those criticisms relate to the documents in the clip:

(1)

The audit trail of documents did not evidence that HDL had entered into a framework agreement with HTE nor between HTE and the Appellant, the critical foundation for the basis of the relationship between the Appellant and HDL was therefore missing.

(2)

Copies of the MVA in the bundle were unsigned and/or incomplete, as identified above, the specification and schedules were missing from the clip. These deficiencies rendered it impossible to conclude that there was a contract for the supply of Temporary Workers at all and, given the scope and formality of the documentation apparently required, it is impossible to conclude that there is an informal contract for supply even by conduct.

(3)

There were specific inadequacies in the documents in the bundle (and thereby the clip) which failed to demonstrate that the procedures and requirements of the MVA had been complied with in terms of processes for placing orders or whether there was an entitlement for HDL to charge for travel and accommodation. In particular and by way of example:

(a)

The MVA provided for the use of specific templates as ordering forms and for such templates to take precedence in case of a contractual conflict. However, no such completed templates had been produced.

(b)

The MVA indicated no entitlement to charge for accommodation, but the schedule attached to invoice 190721 from HDL in the clip demonstrated that accommodation was in fact charged.

(4)

The Appellant has inconsistently presented its explanation of the documents and repeatedly failed to remediate the deficiencies identified in the documentation as highlighted by HMRC.

(5)

It was impermissible to infer the general terms and conditions to be applied to the identified supply of Dr BK by reference to the general terms for 2018 and 2022 however similar the general terms were in the prior and post period.

(6)

The schedules to the HDL invoice, and thereby the invoice, cannot be relied upon because the schedule does not correlate to the relevant purchase order number.

(7)

It was not clear that the RMSL contract was off framework.

(8)

There was evidence that a form of the RMSL contract was signed by RMSL in January 2019 and effective from that date; it is not clear whether the contract in the clip purporting to be dated 14 December but of an unspecified year was ever signed or that either were finalised and agreed between both parties.

151.

In light of these criticisms, we are invited to conclude that the Appellant has failed to meet the burden of proof which falls on it to demonstrate what supplies have been made to it, such that it is impossible to then conclude the liability of those supplies. There are simply too many gaps in the evidence, and it is not for the Tribunal to assume facts or fill the gaps that the Appellant had effectively chosen not to fill.