C4C Investments Limited v The Commissioners for HMRC

Facts

C4C Investments Limited appealed against penalties of £162,587.31 assessed on 13 January 2020 under Schedule 24 Finance Act 2007 for inaccuracies in its VAT returns, assessed on the basis that the inaccuracies were deliberate. The inaccuracies concerned input tax claimed on purchases from DB Recycling Limited, whose sole director, Mr David Bassey, was also C4C's operations manager and, on common ground, responsible for VAT compliance at both companies. C4C claimed input tax on the purchases while DBR filed no VAT returns and accounted for no output tax. In December 2018 and February 2019 HMRC denied input tax of approximately £320,000 under the principles in Axel Kittel v Belgian State and Belgian State v Recolta Recycling SPRL. C4C did not appeal those denials but sought to pay the liabilities. Having engaged SKS (GB) Limited in early 2020, it requested a review of the penalties, arguing only that the unpaid VAT figure was too high and that a larger reduction for assistance should reduce the penalty to 35%. The penalties were upheld on review and C4C appealed to the Tribunal in November 2020. After HMRC's statement of case of 7 April 2021 noted the absence of any challenge to the Kittel denials or to deliberateness, C4C applied in June 2021 to clarify and amend its grounds of appeal.