Olympia Technology Limited (No 2) v Commissioners for Her Majesty's Revenue and Customs
Decision date: 19 January 2010
Neutral citation: [2010] UKFTT 45 (TC)
Overall AI summary confidence: medium
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: medium
This remittal considered whether an ordinarily competent director (with knowledge attributed from senior employee Mr Jivraj) ought to have known that Olympia's purchases in fifteen straight-chain MTIC transactions were connected to fraud. HMRC bore the burden of proving on the balance of probabilities that Olympia ought to have known. The Tribunal allowed the appeal for seven deals (1561, 1565, 1566, 1568, 1574, 1575, 1576) and dismissed it for eight deals (1558, 1559, 1560, 1567, 1570, 1572, 1573, 1580), finding some customers (URTB Sarl, Paris 2000 Sarl, Polska Telefonia) had features making fraud more likely and requiring further enquiry.
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 applicable test in straight-chain MTIC cases is whether the taxpayer — judged by the perspective of an ordinarily competent director and including knowledge attributable from senior employees — ought to have known there was, or was likely to be, a missing trader/importer in the chain, applying the civil standard of proof (balance of probabilities) while taking inherent probabilities and surrounding circumstances into account.
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 taking reasonable precautions does not automatically negate knowledge, and that unusual features of a counterparty (recent change of business, dormancy, minimal information) can be indicators that, in combination with the general inherent probability of fraud in the market, should prompt further enquiries; however, failure to take every conceivable precaution will not necessarily strip the taxpayer of rights where such measures would not have revealed the connection.
Warning
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