United Kingdom Tax Tribunal Clarifies VAT Implications Regarding VAT Fraud by Labor Supplier

The United Kingdom First-Tier Tax Tribunal March 7 issued a judgment in Case No. TC09446, clarifying the VAT Implications regarding VAT fraud by a labor supplier. The taxpayer, a VAT registered company, focused on commercial glazing, cladding, drylining, and commercial interiors. The taxpayer’s labor supplier didn’t properly account for VAT, leading to a tax loss due to fraudulent behavior. The taxpayer claimed input VAT deductions against the loss. Upon the Tax Agency’s denial of the input VAT deductions, the Tax Agency sought the taxpayer’s compulsory deregistration from VAT and imposed penalties, asserting that the transactions were connected to fraud and ...