The First-tier Tribunal has published its full judgement in the case of Jabble v HMRC  UKFTT 00213 (TC). The appellant had appealed a personal liability notice in respect of 123 fraudulent VAT transactions. The appeal was dismissed in respect of all but three of them as for these HMRC had not proven that the appellant actually knew of the fraud.
HMRC had denied claims for input VAT under Kittel, i.e. the VAT was incurred in transactions connected with fraudulent evasion and the appellant knew, or should have known, of this. The personal liability notice of £383,446.43 was based upon tax losses connected to those transactions.
However, a PLN may only be issued where a penalty is payable by a company “for a deliberate inaccuracy which was attributable to an officer of the company”. Knowing of the fraud would constitute a deliberate inaccuracy but an inaccuracy based on a finding that the appellant should have known of it would not.
The tribunal judged that HMRC had proved Mr Jabble had knowledge of the fraud in respect of all of the transactions but three. It therefore allowed the appeal in respect of these transactions and amended the quantum of the penalty.
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