HMRC gets hammered for £1.7m VAT returnHMRC gets hammered for £1.7m VAT return

HMRC gets hammered for £1.7m VAT returnHMRC gets hammered for £1.7m VAT return

HMRC ordered to pay withheld VAT charge

HM Revenue and Customs (HMRC) has been dealt another crushing blow by a London VAT tribunal, after it was ordered to pay back a mobile phone trader £1.7m in withheld VAT.

Olympia Technology Ltd (OTL) has not traded for 18 months after HMRC withheld its VAT repayment under its Extended Verification VAT carousel fraud crackdown.

HMRC had alleged that OTL had fraudulent tax losses in some of its supply chains, but could not provide satisfactory evidence to the court to substantiate the claim.

The victory comes just weeks after HMRC’s VAT fraud allegations against another trader ­ Livewire Telecom ­ were also dismissed by a judge.

John O’Donnell, director of indirect tax investigations at BDO Chiltern, the legal firm representing OTL at the tribunal, said: “This case will give hope to anyone going through a similar situation. This is proof that the tribunal is not just accepting what HMRC is saying.

“Everyone accepts there are traders involved in VAT fraud, but it is unfair to tar everyone with the same brush.”
OTL was also the first trader to launch a petition against HMRC, claiming the government body was “intentionally driving UK businesses into voluntary liquidation”. The petition gathered more than 500 company signatures.

Fred Howarth, chairman of the Federation of Technological Industries, the trade body representing mobile phone and components traders, welcomed the result.
“This is an important victory that gives hope to all in our industry who find themselves in a similar position,” Howarth said in a statement.

“It also emphasises the importance of a properly prepared case and professional representation. Our congratulations to both Olympia and its legal team,” he said.

However, HMRC appeared unwilling to take the verdict lying down. A representative said: “We are due to lodge an appeal against the [tribunal] decision to the High Court.”

The representative was unable to comment further on the case.