Coonley Trading Limited & Anor v The Commissioners for HMRC
Decision date: 24 May 2023
Neutral citation: [2023] UKFTT 452 (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 HMRC’s disallowance of input VAT claimed by Coonley Trading Ltd for periods 10/17–04/19, related penalties, and a Personal Liability Notice (PLN) for the company’s director. The Tribunal found the company had not provided the required documentary evidence to support the input tax claims, upheld amended VAT assessments and penalties, and concluded the inaccuracies were deliberate and attributable to the director so the PLN was upheld. The appeal was dismissed.
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: high
Where a business claims input tax, the claim must be supported by the documentary evidence required by the VAT Regulations; absence of those documents can justify disallowance of input tax. Further, where claimed purchases and sources of funding lack credible contemporaneous documentary support, the tribunal may on the balance of probabilities find the inaccuracies in VAT returns to be deliberate.
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 tribunal rejected late explanations by the director (eg, restricted access to storage, lockdown effects, use of personal credit cards, franchisor emails) where they conflicted with contemporaneous correspondence and HMRC’s enquiries. The decision also records that HMRC may exercise discretion under Regulation 29 to refuse claims not supported by correct evidence while sometimes giving limited allowances for certain documents.