Lancer Scott Limited v The Commissioners for HMRC
Decision date: 17 June 2024
Neutral citation: [2024] UKFTT 545 (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 denial by HMRC of input VAT of £551,695 and related penalties after Lancer Scott Ltd paid about £3.9m into bank accounts controlled by Wilfred Folwell, later convicted of money‑laundering. The First‑tier Tribunal held HMRC’s assessments were issued within time, found the VAT loss was brought about fraudulently, at least one director (Mrs Hosier) knew of the fraud (and Bagley likely knew or acted under Hosier’s influence), and upheld the penalty assessments. The appeals against assessment and penalties were 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: medium
The Tribunal treated receipt by HMRC of the jury bundle from the criminal trial (24 April 2015) as sufficient new evidence to trigger the one‑year notification period under s.73(6)(b)/s.77(6)(b), permitting assessments issued 15 April 2016; where evidence establishes invoiced supplies did not take place or were substantially overstated, those invoices do not establish a right to input tax and HMRC may make best‑judgment assessments; and where loss is deliberate or connected to fraud known to (or participated in by) the taxpayer or its officers, the extended assessment period and penalties under the cited provisions apply.
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 observed (by way of evidential inference) that patterns such as repeated identical invoice items, lax internal controls concentrating invoice approvals in one employee close to a director, and payment flows through a money‑launderer’s accounts with transfers back to directors support inferences of fabricated invoicing and participation in laundering; these observations were treated as factors relevant to credibility and culpability rather than as novel binding legal propositions.