TC09659 - [2025] UKFTT 01211 (TC)

Fecha: 18-Sep-2025

Examples of specific checks carried out by existing businesses

(16)

obtain copies of Certificates of Incorporation and VAT registration certificates. This was done

(17)

verify VAT registration details with HMRC – this was done

(18)

obtain signed letters of introduction on headed paper – not done

(19)

obtain some form of written and signed trade references – not done

(20)

obtain credit checks or other background checks from an independent third party – not done, but SKM was not taking credit risk on BTL

(21)

insist on personal contact with a senior officer of the prospective supplier, making an initial visit to their premises if possible – a visit was made albeit LP was not met

(22)

obtain the prospective supplier’s bank details to check whether (a) payments would be made to a third party and (b) in the case of an import, the supplier and their bank share the same country of residence – SF’s evidence as that payment was only made to verified bank accounts of BTL

(23)

check details provided against other sources e.g. website, letterheads, BT landline records. Not done

190.

The HMRC Leaflet explained that the examples contained in the leaflet are guidelines for the kind of checks a trader could make to help avoid participating in a fraudulent supply chain. It went on to state that the checks a particular trader needs to make, and the extent of them, will vary depending on the individual circumstances.

191.

Some due diligence was undertaken by SKM and some of the examples of steps that traders could take were not relevant to SKM. However, there were additional steps that could have been taken. Balancing these factors we considered that the due diligence by SKM was inadequate but that, as with a number of the other factors set out above, that would not on its own have put a prudent trader in the position of SKM into the position that it should have known that it was participating in a fraud. The most that could be said is that SKM ought to have identified there was a risk it was participating in a fraud.