United Kingdom Tax Tribunal Clarifies VAT Assessment Regarding Supply Chain Fraud

The United Kingdom First-Tier Tax Tribunal April 4 issued a judgment in Case No. TC09479, clarifying VAT assessment in the context of supply chain fraud. The taxpayer, a company involved in the purchase and sale of IT equipment, made purchases from suppliers and then re-sold the equipment to customers in the EU. The purchase and sale transactions were arranged by the taxpayer’s consultant. The Tax Agency issued VAT assessment and penalties finding that although the taxpayer complied with the formalities for zero rating of supplies, the taxpayer knew or should have known that it was participating in fraudulent supply chains. ...