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Following the ECJ’s judgment in Kittel v Belgium, the scope and application of the “means of knowledge” (“MoK”) test in cases of “Missing Trader Intra-Community” VAT fraud (“MTIC” or “carousel” fraud) has been considered twice at interim hearings in UK cases: in Dragon Futures Limited (Decision of the VAT & Duties Tribunal dated 10 October 2006) and Just Fabulous (UK) Ltd & ors [2007] EWHC 521 (Admin).
A decision in the first MoK case after a full hearing on the facts was delivered by the VAT & Duties Tribunal Calltel Telecom Limited and Opto Telelinks (Europe) Limited v HMRC on 20 July 2007.
The Tribunal approved of the application of Kittel to chains of transaction (and to so-called “contra-trading”) and found that the Appellants were not entitled to their repayment claims for VAT, despite their not having dealt directly with any defaulting trader, due to their being “connected with” MTIC fraud within the meaning of the test in Kittel. The Tribunal found that these particular Appellants had had actual knowledge, but it found in the alternative that the same would have been the case on the basis of MoK.
The Tribunal also gave guidance on the disclosure required in cases of this type.
The Appellants have appealed to the High Court by Notice of Appeal dated 14 September 2007.
Philip Moser acted for HMRC.
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Philip Moser QC