![TC09659 - [2025] UKFTT 01211 (TC)](https://backend.juristeca.com/files/emisores/logo_7HSuEAV.png){kind=logo}
Background SKM
Background SKM
SKM was incorporated on 27 August 2020 with its business listed as “wholesale of metals and metal ores.” SF has been the sole director since incorporation. SF and KG each hold 50% of the shares.
SKM’s initial registered address was Northside House, Mount Pleasant, Barnet, Hertfordshire EN4 9EE. On 8 June 2021 this was changed to Eclipse House, Sandown Road, Watford, Herts WD24 7AE. SKM was registered for VAT with effect from 1 November 2020. On its application form the estimated turnover for the next 12 months was stated at £200,000 and its trade class as “scrap metal (wholesale)”.
- Heading
- Introduction
- summary
- Issues for determination
- Evidence and submissions
- Officer Borland
- Officer Pathak
- Mr Feldman
- Mr Granger
- Adverse inferences - Mr Perdicou
- Findings of fact
- Background – SK
- Background KG
- Background SKM
- Background SKM – Knowledge of MTIC
- SKM’s Business – control
- SKM’s business
- BTL’s business and its dealings with SKM
- Commencement of trading with SKM
- Invoices
- HMRC’s First Investigation of SKM
- SKM’s approach to Due Diligence
- HMRC’s investigation of BTL
- HMRC’s Second Investigation of SKM
- EU background
- Right to credit for input tax
- Liability to a penalty
- Officer’s Liability
- Mitigation
- Case law Authorities
- Denial of credit for input tax - Kittel
- Mobilx
- Limits of the relevance of due diligence
- Reasonable explanations for circumstances of a transaction
- the parties cases
- The Appellants’ case
- consideration of the issues
- Knowledge of the existence and prevalence of fraud in SKM’s trading sector
- Significant trade with a fraudulent defaulter
- No evidence of commercial negotiations
- Lack of contractual documentation
- Issues with invoices
- Lack of commerciality in the way the transactions were structured
- Insufficient due diligence
- Viability of the goods as described by your supplier. For example
- Examples of specific checks carried out by existing businesses
- Looking at the overall picture
- Conclusions