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Sandham v HMRC

In Sandham v HMRC [2020] UKUT 193 (TCC) (18 June) the Upper Tribunal held that an agent’s knowledge of the fraudulent evasion of VAT was attributable to its principal in the context of the denial of input tax recovery under the Kittel principle.

A partnership was involved in transactions relating to primary metals. The transactions were entered into by an agent who was authorised to buy and sell primary metals on the partnership’s behalf. The agent knew that the transactions were connected with missing trader fraud. HMRC disallowed the partnership’s input tax claim applying the Kittel principle (established in Kittel v Belgium; Belgium v Recolta Recycling SPRL (joined cases C-439/04 and C-440/04)) which broadly dictates that ‘where a person enters into transactions that are connected with fraudulent evasion of VAT either knowing or having the means of knowing that the transactions were so connected the person is...

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