The appellant, PPX Metal Management Ltd (PPX) appealed against an HMRC decision to deny the deduction of VAT input tax totalling £3,571,232 on purchases of scrap metals, asserting that the claims were not fraudulent.

HMRC issued the assessments for 659 transactions to purchase scrap metals in the VAT periods ending 11/14 to 11/15 on the grounds that the purchases were connected with the fraudulent evasion of VAT.

It said that the appellant knew or should have known that the transactions were connected to fraud because they permitted no other reasonable explanation.