TC09659 - [2025] UKFTT 01211 (TC)

HMRC bore the burden of proof, to the civil standard, in relation to the following issues before the Tribunal:

The Appellants accepted that if we found SKM was in principle liable to penalty, the burden of proof in relation to any possible mitigation of the Penalty under s70 VATA switched and fell to them.

Both HMRC and the Appellants accepted that a possible finding by the Tribunal was that SKM knew, or should have known, that some but not all of its transactions with BTL were connected to fraud, in which case the denial of input tax would relate only to those transactions for which SKM has the requisite knowledge/constructive knowledge. In that event, HMRC would be required to recalculate the Input Tax Denials, and attendant Penalty and PLN.

On the first day of the hearing, in the course of Officer Borland giving evidence, it was conceded on behalf of the Appellants that the loss of tax occasioned by the transactions in dispute was caused by the fraudulent default of BTL and accordingly the issue raised at [6(1)] no longer fell to be determined by the Tribunal.