United Kingdom Tax Tribunal Clarifies Kittel Test Application for VAT Disputes Involving Fast-Moving Consumer Goods

The United Kingdom First-Tier Tax Tribunal May 5 issued a decision in Case No. TC09871, clarifying the application of the Kittel test for VAT disputes involving fast-moving consumer goods supply chains. The taxpayer, a wholesale trader, claimed input VAT deductions on purchases from four suppliers. The Tax Agency denied the claim and imposed a company penalty, contending that there was VAT fraud and that the taxpayer knew or should have known of that fraud. On appeal, the Tax Tribunal partly allowed the appeal, finding that: 1) the taxpayer lacked actual knowledge of the VAT fraud but should have known of ...