Mexcom Limited v Commissioners for Her Majesty's Revenue and Customs

Decision date: 13 April 2010

Neutral citation: [2010] UKFTT 163 (TC)

Overall AI summary confidence: high

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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

Mexcom was assessed to UK VAT on a December 2004 EU acquisition of goods from ORAN Spa and challenging documents of onward supply were found to be inconsistent or fabricated. The Tribunal held the acquisition was chargeable to UK VAT (partly because a UK VAT number was used) and refused Mexcom input tax credit for lack of objective proof the goods were acquired for onward taxable supplies; triangulation relief did not apply. The appeal was dismissed and the assessment upheld.

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 a supplier does not charge local VAT and a UK VAT number is used, the acquisition may be treated as taking place in the UK and be chargeable to UK VAT; a taxable person seeking input tax credit must prove by objective evidence that the goods were acquired for making onward taxable supplies, and triangulation relief under section 14 requires proof that the intermediate supplier indeed made the onward supply and that the customer was VAT‑registered.

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 if Mexcom could subsequently demonstrate that the onward purchaser (Amerix) had accounted for VAT (eliminating any overall tax loss), HMRC might reconsider, and stressed that fabricated or inconsistent documentation undermines claims to VAT‑relieving provisions.

Warning

- Some documentary evidence was inconsistent or admitted fabricated; parts of the transcript are repetitive; none

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