HBS Enterprises Ltd v The Commissioners for HMRC
Decision date: 22 May 2026
Neutral citation: [2026] UKFTT 764 (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
HBS Enterprises Ltd appealed VAT assessments issued by HMRC for quarters 05/23, 08/23, 11/23 and 02/24 arising from sales made on Amazon. The Tribunal found HMRC's arithmetic errors in some assessments and varied or set aside them accordingly, held that Amazon's treatment or accounting for VAT did not relieve a UK‑established seller of its obligation to account for UK output VAT on its taxable supplies, and accepted that the assessments were made to HMRC's "best judgment" even though numeric adjustments were required. The 05/23 assessment was set aside; the 08/23 assessment was varied; the 11/23 and 02/24 assessments were varied with directions to exclude identified non‑UK transactions and for the parties to agree adjusted figures.
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 a person is a UK taxable person and a supply is a taxable UK supply by that person, that person must account for output VAT notwithstanding that an online marketplace operator has treated or accounted for VAT on that transaction. Further, an assessment under s.73 VATA will not be set aside merely because the quantified amounts were incorrect if HMRC made an honest and genuine "best judgment"; the Tribunal may substitute the correct figures.
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 that evidence of an HMRC system error causing a marketplace to misclassify a seller as non‑established may be relevant to the factual picture but does not, by itself, change the legal VAT position of a UK‑established taxable person; and that a marketplace's internal accounting treatment does not necessarily extinguish the seller's legal liability to HMRC.