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In Crow Metals Ltd HMRC [2020] TC07900, the First Tier Tribunal (FTT) dismissed allegations by HMRC that Crow knew or should have known that its transactions were connected with a fraud.

During the hearing HMRC no longer pursued the allegation that Crow knew, but continued to allege that Crow should have known of the fraudulent evasion of its suppliers. 

The FTT found that on the balance of probabilities there were tax losses, as alleged by HMRC, and these were fraudulent.

On whether Crow should have known that its transactions were connected with VAT fraud, the FTT considered the following:

The FTT found that:

The taxpayer's appeal was allowed.

Links

Reverse charge & missing trader fraud (MTIC)
'Missing Trader' fraud, also known as Missing Trader Intra-Community (MTIC) fraud or Carousel fraud, involves the evasion of VAT.

What constitutes a valid VAT invoice?
What is a valid VAT invoice? Can you claim back VAT if the invoice is in someone else's name?

Trader should have known about fraud
In Field Opportunities Ltd v HMRC [2019] TC 7326, the First Tier Tribunal (FTT) held that a trader should have realised that transactions were probably connected with fraud.

External link

Crow Metals Ltd HMRC [2020] TC07900