TC09659 - [2025] UKFTT 01211 (TC)

TC/2023/01059: HMRC’s decision dated 31 October 2022 to deny input tax of £618,428, later varied by decision on 17 February 2023 to £606,097, for transactions relating to purchases of scrap metal from B Trade Limited (“BTL”) in VAT Accounting Periods 02/21 to 08/21(the “First Input Tax Denial”);

TC/2023/10175: HMRC’s decision dated 20 March 2023 to issue a section 69C Value Added Tax Act 1994 (“VATA”) penalty (the “Penalty”) against SKM in the sum of £184,999;

TC/2023/07727: HMRC’s decision dated 10 March 2023 to deny input tax of £8091 for further transactions relating to the purchase of scrap metal from BTL in VAT accounting periods 02/21 and 05/21 (the “Second Input Tax Denial” and, together with the First Input Tax Denial, the “Input Tax Denials”); and

TC/2023/08092: HMRC’s decision dated 26 April 2022 to make SF personally liable for the entire Penalty issued pursuant to s69D VATA (the “PLN”).

whether HMRC had properly denied SKM’s right to deduct input tax by way of the Input Tax Denials on the basis that SKM knew, or ought to have known, its transactions with BTL were connected with the fraudulent evasion of VAT (on the basis of the line of case law referred to below as “Kittel”);

whether the Penalty was properly charged on the basis that SKM knew or ought to have known that its transactions with BTL were connected with VAT; and

whether the PLN was properly charged on the basis that SKM is liable to the Penalty and the actions of SKM giving rise to the Penalty were attributable to SF.