TC09659 - [2025] UKFTT 01211 (TC)

Miss Brown accepted that this was not HMRC’s strongest point in light of the explanation given by SF and KG as to why BTL (and others) traded with SKM, namely the price and cashflow advantages SKM was able to offer. We considered that the evidence from SF and KG presented a convincing picture of the USP of SKM which explained the trading model and was a plausible explanation why BTL would use SKM as a broker when SKM was an even younger company than BTL and had no previous experience in the scrap metal sector.

In his oral evidence Officer Pathak had given his view that SKM’s brokerage business model was not commercially credible. He asserted, but without producing evidence to back his assertion, that HMRC had evidence of brokerage businesses and that the model SKM operated was not a normal model. He was challenged on this by Miss Sheldon.

In relation to this issue, we preferred SF and KG’s evidence as to the commerciality of SKM’s model in preference to Officer Pathak’s. The latter was unsupported by documentary evidence and was in essence opinion evidence in contrast to SF and KG’s direct evidence of SKM’s business model.

Therefore we did not consider this point assisted HMRC’s case.