UT/2024/000069 - [2025] UKUT 00236 (TCC)

The FTT found at [333] that the SOC did “just enough” to make it clear to the Lead Appellants that HMRC’s case was that that the scheme as a whole was a fraudulent one. We do not have the reservation that the pleading did “just enough”: the pleading was clear that the scheme as a whole was fraudulent.

As we have explained above, the existence of a fraudulent or otherwise abusive scheme is legally relevant to the determination of the Ablessio issue. But the Ablessio principle requires no more than that. HMRC needed to show that, as part of an overall assessment, there was sound evidence giving objective grounds for considering that it is probable that the VAT identification number of the person to be de-registered will be used fraudulently.

We consider that a determination that it is probable that a VAT number will be used fraudulently can be made as a result of inferences drawn by reference to the evidence as a whole, whether or not any given person could be said to be fraudulent and whether or not any knowledge or act or omission of a particular person (whether described as an organiser or in some other way) could be attributed to a MUC. If HMRC could establish that the VAT numbers assigned to the Lead Appellants had been used fraudulently, there would (in the absence of any evidence pointing in the contrary direction) be “sound evidence” that it is “probable” that state of affairs “will” continue to be the case. That was the case the Lead Appellants had to meet.

Accordingly, we dismiss ground 1.