TC09659 - [2025] UKFTT 01211 (TC)

Fecha: 18-Sep-2025

Background SKM – Knowledge of MTIC

Background SKM – Knowledge of MTIC

36.

Before his involvement with SKM, SF did not have knowledge of the risks of fraud in the wholesale metal industry, or the concept of MTIC fraud, although he did have a wide business background so would have been generally aware of the risk of fraud in business.

37.

KG had a better knowledge of the wholesale metal industry, but his experience was in the financial sector. Before his involvement with SKM, his knowledge of the risk of fraud in the wholesale metal industry was therefore patchy. We accepted that before his involvement with SKM:

(1)

his understanding was that MTIC/VAT fraud was “things like carousel trading where fraudsters did not pay the VAT” on their purchases/sales;

(2)

his contacts in the metal trade had led him to believe that the majority of fraudulent issues were with things like large loads of imported/stolen “bright copper” which were high value;

38.

KG’s witness statement included the following “Having come from a finance business I always knew and understood the importance of compliance and always relayed this to Spencer and certainly how rife the metal industry is with fraudsters due to the high value of metals”. We found, based on the oral evidence and KG’s witness statement, that KG had drawn SF’s attention to the need for care in trading wholesale metal when SKM was set up or at the latest when trading had started. However, given the limitations of KG’s understanding of MTIC, that would not have alerted SF to the type of fraud that SKM became involved in.

39.

HMRC challenged both KG and SF on the extent of their knowledge of the risks of fraud in the wholesale metal industry. Our findings of fact are based on weighing up the oral evidence after cross examination.