Greystone International Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 13 May 2011
Neutral citation: [2011] UKFTT 321 (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 nine CPU purchase transactions in 2006 for which Greystone claimed input VAT; HMRC traced the purchases into chains involving defaulters and alleged MTIC-type fraud. The Tribunal found on the balance of probabilities that the purchases were connected to fraudulent VAT losses, that Adam Thompson (who organised the deals) knew of the connection and his knowledge was attributed to the company, and accordingly dismissed the appeal and denied the input tax claims, awarding HMRC costs.
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 as binding for decision-making that (1) assignment of the right to receive the purchase price to a third party does not negate that the supplier made a supply “for consideration” so as to attract VAT consequences; (2) a trader claiming input tax must take reasonable precautions against fraud proportionate to the objectively assessed risk (failure to do so disentitles recovery); and (3) the actual knowledge of a director/agent who organised the transactions can be attributed to the company.
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 noted (as persuasive but not strictly determinative points) that bank-flow analyses can indicate contrived trading, contemporaneous notebook entries may strongly support orchestration, prior HMRC dealings (e.g. permission to move to monthly returns) do not relieve a trader of the obligation to take precautions, and features such as same‑day back‑to‑back deals, rapid turnover, prepayment patterns and repeated box offers are indicia of non‑commercial/contrived trading.