HMRC wins case concerning £79k input tax credit

HMRC has won an appeal to the Upper Tribunal (UT) against the First Tier Tribunals’ decision that HMRC was not entitled to deny or restrict, Hi-Octane Import's input tax credit claim of over £79k in respect of any purchases from Q Autos Limited (QAL)

HMRC’s original case was that Hi-Octane Imports, a car dealership, had purchased vehicles directly from Q Autos Limited (QAL) who had fraudulently failed to account for VAT that was due. The case focused on the issue that Hi-Octane either knew or should have known, that its purchases related to fraud.

HMRC considered this to be a case of ‘missing trader’ or ‘MTIC’ fraud. Hi-Octane incurred input tax in their 9/12 and 10/12 VAT periods on 16 transactions for the purchase of vehicles. Ordinarily, this would mean that Hi-Octane would be entitled to credit for that input tax against any output VAT due in those periods and repayment of VAT to the extent that input tax exceeded output tax.

HMRC

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