Mynt Ltd v Commissioners for Her Majesty's Revenue and Customs
Decision date: 16 February 2011
Neutral citation: [2011] UKFTT 162 (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
Mynt Ltd claimed input VAT on numerous mobile‑phone export transactions in 2006; HMRC traced chains to alleged defaulters and denied/recovered the input tax. The Tribunal found the chains were contrived, the defaulters acted dishonestly to evade VAT, and Mynt (through its director) knew or should have known of the connection to fraud. Because Mynt had not taken adequate precautions, the Tribunal dismissed the appeal and refused the input tax claims.
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
The Tribunal applied the Kittel/Mobilx framework and concluded that a purchaser loses the right to deduct input tax where objective factors show the purchaser knew or should have known (i.e. had the means of knowing) that the transaction was connected to fraudulent VAT evasion; a trader who takes all reasonable precautions may retain an "impenetrable shield," but what precautions are reasonable depends on the circumstances and must be properly conducted and acted on.
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 indicated that retrospective or "box‑ticking" due diligence is likely inadequate to show lack of means of knowledge; HMRC's prior inaction or repayments do not by themselves vitiate a purchaser's knowledge or means of knowledge; and uncertainty in CMR/freight evidence does not alone disprove the existence of goods or defeat other evidence of a fraudulent chain.