DJJ Services Ltd v The Commissioners for HMRC
Decision date: 24 February 2025
Neutral citation: [2025] UKFTT 255 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal concerned whether DJJ Services Ltd’s purchases were connected to fraudulent VAT evasion (Kittel) and whether DJJ had used its VAT registration principally for abusive or fraudulent purposes (Ablessio), for the period 09/17–09/18 and disputed input tax of £229,908. The First-tier Tribunal found on the balance of probabilities that DJJ knew or should have known the transactions were connected with fraud, that DJJ facilitated VAT fraud and used its registration for abusive/fraudulent purposes, and dismissed DJJ’s appeals on denial of input tax and deregistration (appeal allowed for periods 06/17 and earlier on timeliness grounds).
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
The tribunal’s reasoning supports a ratio that repeated and consecutive trading solely with defaulting traders, continued trade after receipt of HMRC veto/tax-loss letters, inadequate or absent due diligence and commercial negotiation, and the totality of circumstantial evidence can establish that a purchaser knew or should have known their purchases were connected with VAT fraud; where satisfied on the balance of probabilities that the only reasonable explanation is connection with fraud, input tax may be denied and deregistration may follow.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The judgment contains observational points given less central weight: misaddressed veto/notification letters may explain isolated continued trading and therefore attract less weight, a business’s turnover growth from ordinary clients adds limited probative value on supplier-side fraud, and impersonatory phone calls can indicate wider orchestration of fraud when seen with other suspicious factors.