Mobile phone and computer chip traders scored one victory and two losses over the Christmas period, in rulings worth around £19 million, in their ongoing battle with HM Revenue and Customs (HMRC) over withheld VAT refunds.
Traders Megtian and Red 12 both lost cases against HMRC in the London VAT and Duties Tribunal, over £5.9 million and £2.6 million withheld VAT repayments respectively.
Meanwhile trader Our Communications has won against HMRC its case for withheld input tax totalling around £10 million.
Megtian was found to have 30 fraudulent transactions in its supply chain, on which it made “significant gross profit”. The tribunal said all the defaulting traders in Megtian’s supply chain owe HMRC large sums of money, between £3 million and £77 million.
The tribunal found Megtian’s due diligence lacking. “The cumulative effect of the evidence we have heard has satisfied us that Megtian knew that the transactions were connected with fraud,” said the tribunal.
The tribunal for Red 12 found 46 fraudulent transactions in its supply chain between 2002 to 2006. The tribunal also said Red 12 had easy means of knowledge of VAT fraud. It said of director Nadhan Singh: “The very best that could be said of his behaviour was that he closed his eyes to those aspects which were unwelcome to him.”
The tribunal decision on the Our Communications case was not public at press, although Mobile News understands it was the sole trader victory during December.