In D&D Ltd v HMRC (Upper Tribunal – 8 August) a company (D) reclaimed input tax on the purchase of a large quantity of razor blades. HMRC rejected the claim on the basis that it appeared that the transactions were connected to MTIC fraud. D appealed. The FTT dismissed the appeal finding that D’s directors should have known that the transactions were connected to MTIC fraud. However the Upper Tribunal reversed this decision. Judge Gammie observed that the FTT decision gave the impression ‘that the quantity of razor blades purchased and sold by the appellants’ had been the conclusive factor and expressed the view that ‘the transactions were entirely explicable as ordinary market transactions’. He held that the FTT had ‘erred in concluding that the only reasonable explanation for the circumstances in which the appellants’ purchases took place was that they were connected to fraud’.
