In Euro Stock Shop Ltd v HMRC (UT – 23 July) a company (ESS reclaimed substantial amounts of input tax relating to alleged transactions in computer processing units. HMRC rejected the claim and the First-Tier Tribunal dismissed E’s appeal applying the principles laid down by the ECJ in Kittel v Belgian State ([2008] STC 1537). The Upper Tribunal upheld this decision. Arnold J held that ‘there was evidence before the Tribunal from which it was entitled to conclude that ESS had actual knowledge that its purchases were connected with the fraudulent evasion of VAT’.
Why it matters: In MTIC fraud cases the findings of fact by the First-Tier Tribunal are crucial.
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