HMRC wins VAT appeals

Last month, the VAT and Duties Tribunal ruled that HMRC was right to withhold £19 million in VAT repayments from mobile phone traders Calltel Telecom and Opto Telelinks. The decision follows similar results against traders Dragon Futures in October and Just Fabulous, Evolution Export and Greystone Trading in March.

The Tribunal concluded Calltel and Opto Telelinks both had prior knowledge of VAT fraud in their supply chains, and that their due diligence was merely a cover up for HMRC. As a result, HMRC is not required to repay £19 million to the companies. Both may appeal the decision.

A source said: ‘None of the three decisions so far has gone the way of the traders. But success of course depends on the quality of the case they bring and their trading records and due diligence. These cases will also help lawyers in future appeals on behalf of traders.’

More than 100 appeals are currently being brought by traders against HMRC for withholding VAT.