Anandpreet Singh Powar v The Commissioners for HMRC
Decision date: 17 May 2024
Neutral citation: [2024] UKFTT 415 (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
This appeal concerned a personal liability notice issued to Mr Anandpreet Singh Powar, sole director of Drinks 4 Less (UK) Ltd, after HMRC denied the company's input VAT claims and imposed a Schedule 24 penalty. The Tribunal found the company's purchases were connected to a fraudulent VAT loss and that Mr Powar should have known, and more likely than not did know, of that connection; accordingly the VAT returns were deliberately inaccurate, the inaccuracies were attributable to him, and the PLN of £74,823.63 was confirmed. The appeal was dismissed.
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 company’s transactions display a consistent pattern of contrived back‑to‑back supply chains, very low and consistent margins, lack of commercial documentation, delayed payments and other indicia of pre‑arrangement, a tribunal may infer those supplies were connected to fraudulent VAT loss and that a director should have known; reliance on third‑party due diligence that is not objectively engaged with and does not address report warnings will not necessarily rebut that attribution.
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 decision emphasizes that tribunals may assess the totality and pattern of transactions rather than treating each deal in isolation when determining knowledge or constructive knowledge of fraud, and contrasts this outcome with cases (such as Bachra) where lack of actual knowledge led to cancellation of a PLN, highlighting the factual distinction between "should have known" and actual knowledge.