Aqsa Khan v The Commissioners for HMRC

Facts

The appellant was the sole director and shareholder of Best Buy Scot Limited, incorporated on 7 February 2018 and registered for VAT with effect from 1 March 2019. Her husband, Mr Beg, and his family had for years sold clothing from a retail unit at Market Village in the Forge Shopping Centre in Glasgow, and the company was said to have traded from that unit. All nine VAT returns filed on Best Buy's behalf were nil returns. While checking the returns of a metal trader, Merchant Trader Limited, HMRC found invoices which that trader said Best Buy had issued to it, showing metal sales of £12,790,032 between 1 November 2020 and 2 March 2021, together with due diligence material including a copy of the appellant's driving licence. Best Buy was compulsorily de-registered on 27 April 2021. On 12 January 2022 HMRC assessed Best Buy to VAT of £2,132,670 for the periods 11/20, 02/21 and the final period; no appeal was brought against those assessments. On 16 May 2022 HMRC issued a penalty of £1,492,869 to Best Buy and a personal liability notice making the appellant liable for 100% of it. Both were upheld on review. The appellant's case was that her identity details had been stolen and Best Buy hijacked, and that she had never traded in metals.