Active8 Alarms Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 28 January 2010
Neutral citation: [2010] UKFTT 48 (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 refusal of input VAT claimed on an invoice from Sensor Technologies for 500 alarms and a related s.60 VAT penalty. The First-tier Tribunal found the ST invoice was fabricated, there was no believable supply entitling the claimant to input tax, and the presentation of the invoice was dishonest so the s.60 penalty and mitigation were upheld. The appeals against disallowance of input tax and against the penalty 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: high
A claimant must establish that a real supply occurred before input VAT shown on an invoice can be allowed; a forged or fabricated invoice does not create entitlement to input tax. For a s.60 penalty the Commissioners must prove, on the balance of probabilities, conduct involving evasion of VAT and dishonesty; where those elements are made out the penalty and the exercise of HMRC’s discretion can be upheld.
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 made observational comments on procedural and evidential matters—including the effect of unreliable or incomplete documentary proof (and weaknesses in oral evidence) on credibility, and procedural points such as handling evidence/hearing witnesses in the absence of a party—which may inform case management and assessment of evidence but are not central to the liability findings.