United Kingdom Tax Tribunal Clarifies VAT Liability, Penalties for Companies Trading in Telephone Calling Cards

The United Kingdom First-Tier Tax Tribunal Dec. 17, 2025, issued a judgment in Case No. TC09730, clarifying VAT liability and penalties for companies trading in telephone calling cards. The taxpayers, two companies and an individual who was the director and sole shareholder of both, were engaged in the business of trading telephone calling cards. The taxpayers claimed input VAT deductions on purchases from a Hong Kong supplier and argued that they acted as agents, not principals, in the supply chain. The Tax Agency contended that the companies acted as principals, failed to hold valid VAT invoices, and didn’t apply the ...