UT/2023/000084 - [2024] UKUT 00382 (TCC)

This ground, as argued by Mr Brown, focusses on the FTT’s reference in [249] to a witness statement and exhibit (both of which the FTT had previously ruled to be inadmissible) to make a point adverse to the appellant.

The background is as follows. The appellant applied on 12 January 2022 (around two months before the hearing) to admit a further witness statement from Mr Orton. The relevant topic concerned Mr Orton’s phone call enquiries to HMRC as to whether the memory cards were subject to reverse charge VAT. As the FTT explained at [97], the reverse charge was a legislative measure introduced to counter MTIC fraud; if it applied, it was the customer instead of the seller who accounted for output VAT to HMRC.

Mr Orton attached exhibits to this witness statement, the first of which was an email to Beigebell from a company called Servium that included text regarding the reverse charge. The FTT summarised Mr Orton’s further evidence (at [18(1)]) as being that:

“The reverse charge enquiry to HMRC in July 2015 was in relation to a different customer unrelated to the deals in question. Exhibit 1 in support thereof is a copy of email communications on the subject of ‘Reverse Charge VAT’, on the face of which were from 4 June 2015. The point being made is that ‘the Reverse Charge request was made on an order for Phablets supplied to a company called Servium’, which has the same office address as Beigebell at Trident Court, Chessington, and unrelated to the deal chains in question as suggested by HMRC.”

The FTT rejected the appellant’s application to admit Mr Orton’s further witness statement on the basis of the length of time since 2015, and because the counterparties to the e-mails were not called as witnesses. The FTT went on to say this at [21(3)]:

“To refuse the application means that Mr Orton would not be able to speak to the additional email exhibits, but there is no embargo against any reference being made in his oral evidence, and the probative value of any statements so made, so far as relevant to the substantive issue, would be assessed in the context of the overall credibility and reliability of Mr Orton as a witness.”

Beigebell’s ground takes particular issue with the criticism the FTT made towards the end of [249]. This paragraph was in the part of the Decision discussing the inconsistencies and other issues with Mr Orton’s evidence; that part concluded with the FTT deciding that Mr Orton was neither credible nor reliable. The paragraph read:

“The transcript of the second telephone call to HMRC by Orton to enquire whether SD memory cards come under the reverse charge is clear evidence that Orton did make the enquiry at the relevant time specifically in relation to the product that was concerned in the fraudulent transactions. In the application to lodge further documents for the re-hearing, Mr Orton sought to refer to his enquiry phone call on the reverse charge relied upon by HMRC as being in relation to a different customer Servium, and exhibited the emails with dates from June 2015 (§18(1)). The application was made before the transcript of the two phone calls was produced by HMRC, since only Officer Redman’s [sic] summary of the first phone call was included in the 2019 Hearing Bundle. It is disturbing to note that in the appellant’s application, part of Mr Orton’s additional evidence was in fact to assert that the enquiry on reverse charge was for a different supply, and totally unrelated to the transactions on the SD memory cards.”

In his oral submissions, Mr Brown clarified that this ground of appeal contained two points.