Promeridian Services Limited v The Commissioners for HMRC
Decision date: 7 March 2025
Neutral citation: [2025] UKFTT 296 (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
Promeridian Services Ltd, a VAT-registered company whose sole director and shareholder was Mr Marian, had all labour supplied by TCS, a supplier that committed VAT fraud. HMRC denied c.£559,896 of input tax, deregistered Promeridian, imposed a company penalty and served a personal liability notice on Mr Marian; the Tribunal found that, while two of HMRC's ten alleged indicators (prior contact between Mr Marian and TCS’s director and basic invoice errors) were significant, overall Promeridian did not know and should not have known its transactions were connected to VAT fraud. The Tribunal allowed Promeridian’s appeals against the input tax denial, deregistration and company penalty, with the personal liability finding following from those conclusions.
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
Where suspicion arises from objective factors, the tribunal must assess the totality of the circumstances and decide, on the balance of probabilities, whether the taxpayer knew or should have known of a connection to fraud; isolated indicators (such as poor invoice formalities or prior close contact with a supplier) can be relevant but are not decisive without a broader evidential picture.
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 indicated that defects in the reliability of HMRC interview records (for example due to translation failures or absence of an accountant at interview) can undermine those records’ evidential weight; it also suggested that factors like rapid turnover growth, unusual profit margins or lack of certain commercial insurances are not themselves dispositive of knowledge of fraud without clearer indicia.
Warning
- Record of an HMRC interview contained translation issues and was treated as unreliable in parts.