Radarbeam Ltd v Commissioners for Her Majesty's Revenue and Customs
Decision date: 10 September 2010
Neutral citation: [2010] UKFTT 431 (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
Radarbeam sought repayment of input VAT (~£4.96m) for eleven April–June 2006 deals; HMRC denied the claims on the ground the deals were connected to fraudulent VAT evasion. The Tribunal found the eleven transactions were part of chains linked to defaulting traders and that Radarbeam (through its director Mr Todd) had actual knowledge of the fraud, so the input tax was disallowed and HMRC was awarded 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
Where objective and circumstantial evidence shows transactions form part of an orchestrated supply chain connected to defaulting traders, a purchaser can be found to have the requisite connection to VAT fraud; actual knowledge may properly be inferred from a cumulative pattern of features including prior warnings, deficient or sham due diligence, contrived uniform mark-ups, mass movements of goods and funds, implausible documentation, and close banking or logistical links to known fraudsters.
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 endorsed the aggregation of multiple circumstantial “strands” of evidence to discern whether transactions are part of a fraudulent scheme, while warning against impermissible hindsight. It also observed that relying on a due-diligence adviser who is conflicted (for example, employed by the supplier) undermines a trader’s claim to bona fides.