UT/2024/000070 - [2025] UKUT 00210 (TCC)

In addition to receiving a large volume of documentary evidence, the FTT heard evidence from Mr Obed Ripley, a shareholder of the Appellant, and Mr Simon Ripley, a director of the Appellant. It also heard evidence from: Matthew Browning, from the Appellant’s accountant (he had analysed the various transaction documents to produce a spreadsheet linking the documents to the relevant loads and from HMRC’s officer, Raffaela Lahi regarding the exchanges between the Appellant and HMRC’s investigating officer (Julie Yeomans – who had since retired). There is no challenge to the findings the FTT made on the basis of this evidence (in contrast to the inferences that were drawn or lack thereof which the Appellant does take issue with). In this section we briefly outline those findings and the FTT’s reasoning in order to put the Appellant’s grounds in context. We will elaborate on these as appropriate under the relevant ground.

The FTT set out how, the scrap metal business of the Appellant, had been a family-run for successive generations since 1928 and explained how the basis had evolved over the years ([28] to [31]).

Various findings were made regarding the nature of scrap metal business for instance that it was a high-volume trade with low margins, that the metal was expensive to transport and that because of the wear and tear cause to transport vehicles only a limited number of haulage firms were prepared to transfer it. Payments had to be made by bank transfer ([32] to [40]). The FTT went on (at [41]) to describe the steps and background to typical export transaction which may be summarised as follows.

At [42] the FTT described the suite of documents which could be matched to each transaction: (1) sale invoice (2) bank statement (3) weighbridge ticket recording net weight of load. (4) CMR (International Consignment Note) produced by haulier. (5) Annex VII documents (The FTT explained this was information required to accompany shipments of waste and is completed by the Appellant using information given in advance by the customer and from the haulier).

The 72 transactions which the Appellant relies on were each with Gregory Callewaert t/a Recyclink International (“Recyclink”). The FTT set out that the Appellant had dealt with Recyclink since 2000, that it did not make a specific payment for a load but had a running account and topped up its balance. The Appellant was always paid in full before the transfer. It was Recyclink who arranged the transport and mainly used a Belgian haulier. All the goods were dispatched from the Appellant’s yard at either Ashford or Hailsham and the ferry port used was Dover ([43][44]) .

By reference to Mr Browning’s statement, which had attached example of the documents he had used to identify a particular transaction (#9), the FTT described in comprehensive detail the precise contents of these various documents (comprising a sales invoice, weighbridge ticket, CMR, Annex VII documents, P&O Boarding cards, the e-mail conversations that Mr Browning had sought to match to the transactions). It also set out the conversations Mr Browing had with a P&O employee to explain the basis and time point reference of the process around provisions of boarding cards and the significance of the information on those ([52] – [66]). (HMRC’s submissions included that the P&O boarding cards could not be used to support the Appellant’s case as they had not been obtained and retained within the three-month time limit in Vat Notice 725 ([115])).

The FTT then recorded the chronology of exchanges between HMRC and the appellant and details of various pieces of additional information provided to HMRC Officer Lahi, including WhatsApp messages and her observations that none indicated whether the goods were removed from the UK ([67] to [81]).

After setting out the relevant law and summarising the parties’ respective submissions ([82] to [116]), the FTT (at [118]) rejected the Appellant’s argument that the burden of proof had passed to HMRC, referring to the Court of Appeal’s reasoning in Peter Griffiths v TUI (UK) Ltd [2021] EWCA Civ 144. The FTT also rejected the Appellant’s argument that there was scope for HMRC to look at evidence obtained outside the three-month time limit specified in VAT Notice 725 ([119-125]). As regards the question of whether the evidence of removal was sufficient, the FTT analysed in turn the sale invoices, bank statements, weighbridge tickets, CMRs, Annex VII documents, P&O boarding cards, e-mails, and WhatsApp messages. In respect of each category of documents the FTT considered (for reasons which we summarise when dealing with Ground 2 below, and Ground 3 in relation to the P&O boarding cards) that none of them were sufficient to show removal ([127][147]).

The FTT accordingly concluded (at [148]) that “none of the documents (individually or taken as a whole) relied upon by [the Appellant] evidence export of the loads of scrap metal per the requirements of VN 725” and dismissed the appeal.