TriCell LTD (fka TCLL)

[Stock]

Fee, Fi, Fo, Fum.
I smell the blood of an Englishman,
Be he living, or be he dead,
I’ll grind his bones to mix my bread.

[Stock]

Yea! Rabble, rabble, rabble!

[nsearle]

Dumper!

Who's the arsehole that just dumped 500k shares? Perhaps I should ask who's the goof that bought them!

This has been a slow and painful death. Haven't heard a thing on the VAT Tax issue in a year. No operations and the lawyers will probably eat up our VAT refund if it ever happens. SO - guess it's another LOSER! Hard to believe that it went from sponsoring a professional soccer team & arena to $0.0002.

[Stock]

OK, so maybe not Tuesday, I give up.

Who is monkeying with the stock?

[Stock]

TCLL Time & Sales - lol

Time 		Price 	Volume 	Exchange 
 11:05:59 		0.0005 	20000 	OTO 
 11:02:47 		0.0005 	20000 	OTO 
 11:01:54 		0.0005 	20000 	OTO 
 11:00:29 		0.0005 	20000 	OTO 
 10:59:33 		0.0005 	20000 	OTO 
 10:58:56 		0.0005 	20000 	OTO 
 10:58:08 		0.0005 	20000 	OTO 
 10:57:19 		0.0005 	20000 	OTO 
 10:55:34 		0.0005 	15000 	OTO 
 10:55:31 		0.0007 	5000 	OTO 
 10:52:51 		0.0007 	20000 	OTO 
 10:49:30 		0.0007 	20000 	OTO 
 10:48:18 		0.0007 	20000 	OTO 
 10:46:52 		0.0007 	20000 	OTO

[powerbattles]

Why TCLL will going up on next Tuesday?

[Stock]

Psst, don't tell anybody, TCLL is going to go up next Tuesday.

I am spamming this via PM to just some of my closest friends, so don't tell, Buckey














































lol

[Stock]

a pox upon mr. seller @ .0011 boo!

[Stock]

TCLL to da moon!

[Dspetry]

As of August 4, 2010:

Signature Stock Transfer will no longer provide share structure information for any of our clients. Please refer to public sources for latest company filings such as Edgar filings, the SEC website, or the issuer's website.

Thank you

Denise Bogutski
[e-mail]

Signature Stock Transfer, Inc.
PMB 317
2220 Coit Road Suite #480
Plano, TX 75075

[Stock]

Fellow bagholders, unite!

[nsearle]

amen to that Generic! A penny a share would be a HUGE move.

[Stock]

NV revoked in 2007, and the last action I can see was 2006

http://nvsos.gov/sosentitysearch/CorpDetails.aspx?lx8nvq=tA%252bYRXa2A%252bMXokr1TDXBpw%253d%253d&nt7=0

http://nvsos.gov/sosentitysearch/corpActions.aspx?lx8nvq=tA%252bYRXa2A%252bMXokr1TDXBpw%253d%253d&CorpName=TRICELL%2c+INC.

If there is anything going on, maybe we'll know about it some time down the line, but it's a total guess.

the premarket trade caught my eye, and clearly that's just weird.

[Stock]

I'm a bad liar, sorry. I did pump the stock on another board

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=62830455

[Buckey]

is that the best you can do.

have you tried

" last day to buy at these prices!!!!!!"

"Float Locked DOWN!!!!!

" I just got off phone with CEO - reverse merger in works" with a Lithium/Silver producer and CEO owns most of float"

[Stock]

oh, boo! well, that says the current guys aren't interested, doesn't it?

[Dspetry]

----- The following addresses had permanent fatal errors -----
<[e-mail]>
(reason: 550 No Such User Here)

----- Transcript of session follows -----
... while talking to tricellinc.com.:
>>> DATA
<<< 550 No Such User Here
550 5.1.1 <[e-mail]>... User unknown
<<< 503-All RCPT commands were rejected with this error:
<<< 503-No Such User Here
<<< 503 Valid RCPT command must precede DATA

[Stock]

TCLL to da moon!

[Stock]

LOL - no I just have a bad case of stuckholderitis

lunch money if it gets to a penny a share lol

[Buckey]

U a paid promoter on this? IF so sign up to be mod LOL

[Stock]

It's very weird for this to trade premarket

but having follow up volume is even more strange

Time Price Volume Exchange
09:55:51 0.003 75000 OTO
09:54:35 0.003 300000 OTO
09:46:33 0.003 100000 OTO
09:38:05 0.003 50000 OTO
09:38:04 0.003 25000 OTO
09:37:51 0.003 50000 OTO
09:37:44 0.0025 25000 OTO
09:34:26 0.0019 2999 OTO
09:34:23 0.0019 50000 OTO
09:33:22 0.0017 120000 OTO
09:05:45 0.0017 25000 OTO

[Stock]

Traded premarket

Time Price Volume Exchange
09:05:45 0.0017 25000 OTO
04/27 0.001 125000 OTO
04/27 0.001 63200 OTO
04/27 0.0012 50000 OTO
04/27 0.0012 56800 OTO
04/27 0.001 125000 OTO
04/27 0.001 200000 OTO
04/27 0.001 500000 OTO
04/27 0.001 5000 OTO
04/26 0.0007 5000 OTO
04/26 0.0007 3500 OTO
04/25 0.0007 100000 OTO
03/23 0.0007 70000 OTO
03/14 0.0007 20000 OTO
03/03 0.0009 495000 OTO
03/03 0.0009 5000 OTO
02/10 0.0009 5000 OTO
02/04 0.0007 20000 OTO
02/04 0.0006 20000 OTO
02/01 0.0008 135000 OTO
02/01 0.0007 100000 OTO
01/31 0.0004 60000 OTO
01/31 0.0005 100000 OTO
01/31 0.0005 100000 OTO
01/31 0.0005 50000 OTO
01/31 0.0005 50000 OTO
01/31 0.0005 200000 OTO
01/21 0.0007 20000 OTO
01/21 0.0008 160000 OTO
01/21 0.0008 100000 OTO

[Stock]

TCLL charts that really do work

[Stock]

TCLL charts that work. Stockcharts.com gave up.

.01 here we come lol

[trailorparkboy]

I dont know why but I just googled map their address 6 Howard Place
Stoke-On-Trent, ummm, it sure doesn't look like a facility doing 100s of million of dollars.....

[Stock]

It's an easy double from .001

Just requires proper windage and elevation.

[trailorparkboy]

Can anyone find anything on the The Wells Group, Inc. or the Guardline Group?

I googled them and it takes me to different companies other than phone...


ricell International, the trading subsidiary, supplies and distributes mobile telephones, telephone accessories and electronic commodities in Europe and Asia. Tricell Distribution, the U.K. logistics and support division, supply airtime and hardware to the dealer network and call centers throughout the U.K. Tricell Distribution has recently completed the Virtual Service Provision License agreement with Vodafone and the Guardline Group. Contact: The Wells Group, Inc. ( www.tricellinc.com )

[trailorparkboy]

I can't find tho old website anymore, it takes you to another company.......

I think this is history

[Stock]

your turn lol

[nsearle]

Can anyone shed any light on the current situation? It's been months if not years since anything of value was posted (at least valued from a positive perspective). I've been riding this dead horse for so long that I wish someone would just put a bullet in it and end the misery.

[powerbattles]

Can you explain is this mean that they will Appeal court?

[Hk Fooey]

N2J Ltd v HMRC
Chancery Division, 3 June 2009
N2J was refused zero-rating of certain goods that
it thought had been exported. HMRC denied that
there was any evidence of export and N2J was
unable to persuade the Tribunal that the goods
had in fact left the UK.
N2J attacked the Tribunal’s decision on several
grounds:
• that the Tribunal had concentrated on
whether N2J had taken steps to avoid being
involved with fraudulent transactions, when HMRC
had at no point accused N2J of fraud;
• that the Tribunal had not explicitly found that
the goods had not been exported;
• that a CMR consignment notice (which in this
case stated that the goods had been exported)
was conclusive evidence of the facts stated on its
face; and
• that once HMRC had accepted a CMR as valid
it could not later refuse to acknowledge its validity.
The Judge rejected all of these arguments.
The Tribunal had concluded that the goods had
not been exported and that was determinative of
the case, unless an incorrect CMR was conclusive
evidence, which under established law it was not
(see R (oao Teleos plc & others) v CCE Case C-
409/04 [2007] ECR I-7797).

http://www.theiit.org.uk/ITV109.pdf

[Hk Fooey]

http://www.taxjournal.com/tj/articles/vat-focus-vat-and-human-rights

In the recent case of N2J Limited v Commissioners of HMRC 20895 [2008] (which is being complained to the ECHR), the Manchester Tribunal made no enquiry it seems into the probative evidence of the specific supply chain evidence, and ignored evidence in front of it that the taxpayer was taking some precautions. There was no carefully crafted balancing exercise as set out by the CJEU, which had also not placed all of the burden of proof of export on the taxpayer. The Manchester Tribunal, using a case concerning the liability of biscuits (Kalron Foods Ltd v Revenue and Customs Commissioners [2007] SRC 1100), felt able to do so without reasoning or authority. The arbitrariness of the Tribunal, the omission to consider the evidence and make wrong statements of fact and in particular the lack of lawfulness in the failure to apply the formulation set out by a court of final instance (see for example Immobiliare Saffi v Italy, Application No 22774/93 (2000) 30 EHHR 756) could amount to a convention violation of Article 1 to Protocol 1.
( Seems Tricell going to European Court Of Appeal? )

[trailorparkboy]

This article came out Nov 1st 2010, not saying it pertains to the TCLL court case it just explains what happen to a lot of shady mobile phone companies.
Not hearing anything from TCLL management leads me to believe that where's there's smoke there's fire.
It seems they ran for the hills and left us with an emty shell or we would of had some communication after the last 8k which talked about the legal team that was going to fight for TCLL.
IMO

Missing Trader Intra Community Fraud (VAT Carousel Fraud)
Value Added Tax or VAT as it is more commonly referred to is an indirect taxation of the goods and services that we all have to buy. As a percentage of the sales value, some 17.5% in the UK rising to 20% in 2011, it represents many billions of revenue for the tax authorities. Yet in recent years it has been a prime target for the fraudsters. As with any fraud, it is not possible to say exactly how much revenue is being lost at any particular time, certainly the authorities are loath to admit the full extent of the amounts stolen from them. Some commentators put the losses to the European economy in the range of several hundred billion pounds every year – yes a multiple of £100,000,000,000!

There has been much written on the subject of VAT fraud, particularly Missing Trader Intra Community fraud – but what is it? Put simply, it is an opportunity for fraudsters to claim back fictitious VAT from the authorities. The system of VAT involves a trader charging VAT to customers that they sell to. Those customers in turn charge VAT to their customers, while offsetting this with the VAT they pay to suppliers. Thus, the tax is on the profit element of a trade.

The problem arises at the start and end of any chain of trading activities – and is a result of the concessions that arise within the European Community that remove the need for VAT obligations to arise between member states. A fraudster can exploit the system in the following way:

A company in Spain has a batch of goods to sell – these are sold to an importer in the UK. The UK importer sells the goods to another UK company who then re-exports the goods to Hong Kong. The UK importer buys the goods from Europe free of VAT. He adds VAT within the UK to his invoice when he sells to the next UK company. The second UK company must pay this VAT to the importer. The second UK company now re-exports the goods free of VAT abroad – either to Europe or the rest of the world.

If this series of transactions was legitimate, the VAT charged by the importer to the second UK company would be paid over to HMRC. The second UK company would then reclaim this VAT back itself. These would be the only two VAT transactions and they would cancel each other out as far as the authorities are concerned. Because the goods were imported then exported, there would be no net VAT benefit to the UK authorities who are only collecting the tax on the basis that it is on the goods and services that are used within the UK.

However, if the importer defaults on paying the tax – by disappearing or becoming insolvent – yet the second UK company still collects the tax it has paid to the importer, the UK tax system will be out of pocket. This is at its simplest how MTIC frauds work. In practice, the goods may go through a chain of many buffer traders within the UK, or the goods may be fictitious in the first place. There are many more complex variations on the fraud, which essentially targets the huge amounts of VAT that are payable on goods and services.

Mark Jenner & Co has experience in dealing with MTIC VAT frauds for both the fraud regulators, for companies targeted by HMRC for extended verification procedures and for white collar crimes being prosecuted for the fraud. The problem seems to have been that the fraud was very easy to commit on a vast scale. Fraudsters realised that if they claimed some fictitious VAT they could get away with it and developed various different schemes for doing so. Then they realised that there was little need for any effort – simply make the fictitious transactions bigger!

The classic badges of MTIC fraud seem to be a small company that within a year or so is turning over many £millions. During an enquiry for Companies Investigation Branch recently it could be seen that the target company was trading with various other companies that showed this phenomenal growth – for example a company set up in one year had a turnover of £50,000. The next year the turnover reached £1,200,000 and the following year £13,500,000. It is very unlikely that any company could show this sort of growth naturally – but if you are fabricating the invoices, why not? Many companies investigated by HMRC for VAT fraud that were supposedly turning over many £tens of millions each month turned out to be nothing but a computer in the culprit’s bedroom!

The problem that HMRC had during the early part of the decade – i.e. around 2000 to 2006, was that there was a massive growth in the mobile phone business. MTIC fraudsters like mobile phones because they are small and valuable – and can be traded without warehouses and other serious logistics. Within the “official” trade between manufacturers and approved distributors, a substantial “grey” market in phones also grew. This was a legitimate business in itself, but was quickly exploited by the fraudsters until the size of the “grey industry” was apparently bigger than the total global trade of mobile phones altogether. When HMRC realised how big their losses probably were, with typical traders claiming back £10/£20 millions and more each month in recoverable VAT, in 2005 and 2006, they simply stopped any repayments pending “extended verification enquiries”. This probably meant that a number of legitimate traders suffered, but the fraudsters were in a position whereby they could not trade any more until they had been properly investigated by HMRC. These investigations turned into criminal enquiries in many cases, and the UK courts are still seeing prosecutions dating back to this time being processed.

The authorities attempted to curb abuse of VAT fraud in this way by reversing the VAT charge on certain goods. This means that the buyer not the seller pays the VAT on the trade of typical MTIC goods such as mobile phones and computer parts. HMRC’s information sheet VAT 08/07 provides information regarding the payment of VAT in relation to these products. The trouble was that the tenacious fraudster simply switched his attention to different goods, that still were accounted for in the old way – these could include any goods that are traded – but in order to build up big profits, the VAT thieves always will look at high value easily moved items that can be dealt with without the need for substantial business infrastructures – certain pharmaceuticals/cosmetics, spectacles and associated products, high value spirits and even trading in carbon credits have all been targeted by the fraudsters, together with any other product that can be traded and exported – including clothing, furniture, household products, fabrics etc etc.

The only secure solution would appear to be a complete change in the VAT system.

[powerbattles]

TCLL heard anything?

[powerbattles]

Any update on tcll?

[Stock]

Salt was licked.

[Hk Fooey]

Change in Directors or Principal Officers



Item 5.02 - Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
On August 22, 2006, John Sumnall and Neil Proctor resigned as member of the Board of Directors of Tricell, Inc. (the "Company"), effective immdiately. There was no disagreement or dispute between either Mr. Sumnall or Mr. Proctor and the Company which led to their respective resignations.

On August 22, 2006, Andre Salt resigned as chief executive officer and chairman of the Company, effective immediately. There was no disagreement or dispute between Mr. Salt and the Company which led to his resignation.

On August 22, 2006, our Board of Directors appointed James Reed as Chief Executive Officer of the Company to fill the vacancy in this position created by Mr. Salt's resignation. Mr. Reed has served as President of the Company since November 18, 2005.

On August 22, 2006, our Board of Directors appointed Ian M. Herman and Melvyn S. Langley to the Board of Directors of the Company. Our Board of Directors also appointed Mr. Langley as Chairman of our Board of Directors to fill the vacancy in the chairmanship created by Mr. Salt's resignation. There are no understandings or arrangements between Messrs. Herman and Langley and either Messrs. Herman or Langley any other person pursuant to which Messrs. Herman or Langley was selected as a director. Mr. Herman and Langley will serve as independent members of the audit and compensation committees of the Company. Messrs. Herman and Langley do not have any family relationship with any director, executive officer or person nominated or chosen by us to become a director or an executive officer. Mr. Langley is also a consultant of the Company whereby he receives $3,000 a month as compensation for services rendered. As a consultant of the Company, Mr. Langley provides financial and operational advice to the executive officers of the Company.

Mr. Herman has served as Chairman, Director and Chief Executive Officer of Global Aircraft Solutions and Hamilton Aerospace Technologies from 2002 to the present. From 1995 to 2000, Mr. Herman served as Chairman of the Department of Trade and Industry London and Southeast Development Board for the British government. From to 1988 to 1990, Mr. Herman served as Chairman and Chief Executive Officer of British World Airlines. Mr. Herman is a chartered accountant.

Mr. Langley has served as a principal in MSL Consultants from 2003 to the present. From 1993 to 2003, Mr. Langley served as the senior partner of Langley and Partners. From 1973 to 1993, Mr. Langley served as the main resident tax and insolvency partner at Sorskys. Mr. Langley is a chartered accountant

[jking1999]

Bleak reading, but I thank you for the info.

[Stock]

The estimates before the Court of Appeal put the potential tax losses as a result of MTIC fraud as being £5.5 billion in 2005-2006 and, more recently, £2.5 billion in 2008-2009. It was also made clear to the Court that there were waiting behind this case more than eight hundred live appeals involving £2 billion of VAT. The Court was not in the dark as to the expected significance of its judgment.

---

The result and comments

The Court of Appeal dismissed all of the appeals before it, concluding that the error of law made by the Tribunal in Moblix (asking whether the trader ought to have known that the transactions were more likely than not to be connected with fraud) was not material, as the Tribunal had made sufficient findings of fact to meet the correct test.

It is fairly clear that the Court of Appeal intended to send a message to traders in certain industries that if they close their eyes to the obvious, they risk being considered participants in the fraud that they facilitate, and so losing their right to deduct VAT. There is certainly much in Moses LJ's judgment that will have been welcome to HMRC.

The Court also, however, made clear that it is not enough that the trader simply ran the risk of being involved in fraud; and while the line between this and having been in a position where it ought to have known of the connection with fraud may be difficult to discern in many cases, this must provide some comfort to the trader who knowingly enters a suspect industry but attempts to steer clear of fraudulent trading.

One substantial effect of the judgment may prove to be the shifting of the focus onto the ability of the trader to show an alternative explanation for the circumstances suggestive of fraud. It is to be expected that traders will face an uphill task to convince a sceptical tribunal that there was at the relevant time a legitimate grey market in which, for instance, huge and consistent returns were readily available to start-up companies with no previous experience in the sector.

Melanie Hall QC, Philip Moser, Ian Hutton and Fiona Banks were instructed by HMRC

[Stock]

Company Officers Andre Salt, CEO

[trailorparkboy]

www.monckton.com/docs/library/MOBILXODJUNE2010.pdf

[trailorparkboy]

Here's an article explaining the VAT carousel frauds, if anyone is interested



cent trader in VAT carousel fraud retains entitlement to input tax deduction
The ECJ has held that an innocent trader does not lose his right to VAT input tax deduction merely because his input was part of a transaction chain to mask a carousel fraud committed by other parties.

Three UK companies appealed against Customs and Excise decisions rejecting their input tax deductions because they were trading in goods used by other parties as the subject of a VAT "carousel" (merry-go-round) fraud. In each case, the trader had a large net recoverable from his local purchases of computer components for export. A carousel fraud is committed by a trader who buys goods from another EU state for resale locally. His customer, the so-called "buffer" correctly accounts for the VAT on his purchases and sales. His sales are to another buffer. Ultimately, the goods are sold back to the country of origin, and end up in the hands of the original supplier. The process is then repeated. The perpetrator of the fraud does not account to the authorities for the VAT charged to the first buffer and absconds with the cash once they start looking into his activities. He then becomes known as the "missing trader".

In a carousel fraud, the missing trader is necessarily guilty, but some of the buffers and the original supplier may be innocent. Computer components and mobile phones are examples of goods particularly prone to carousel fraud - high value, low weight items frequently traded around the EU in large quantities and thus, at the wholesaler level, not susceptible to individual identification. In the cases currently at issue, the traders had played the role of final buffer in the country of the missing trader, that is they had taxable inputs - their purchases from the penultimate buffer - and tax-free outputs, their sales to the country of the original supplier. In all three cases they were innocent of wrong-doing. They did not know of the fraudulent intent and could not have known of the fraud itself, not least since the offence had not yet been committed. The UK Commissioners of Customs and Excise took the view that, innocently or not, the companies had played a part in a fraudulent chain of transactions and were not therefore engaged in economic activity. This alone was enough to deny them input tax deduction. The traders protested and ultimately the cases came before the ECJ which joined them in a single trial.

The ECJ decided in favour of the innocent traders. "Economic activity", "supply of goods" and "taxable person acting as such" are objective terms, unaffected by the purpose or results of the transactions, or by earlier or later events in the transaction chain. Provided the transactions are lawful in themselves, the right to input tax deduction cannot be denied to a trader because of a fraud by another member of the transaction chain, "of which that taxable person had no knowledge and no means of knowledge". The court was at pains to emphasise the distinction between lawful transactions misused for fraudulent purposes by another party and those unlawful in themselves (such as trafficking in drugs) which cannot be "incorporated into economic channels". It also emphasised that the correct payment of the VAT on an earlier or later sale of the same goods is irrelevant to the input VAT deduction of the given taxable person.

[nsearle]

very interesting reading TPB. Seems there is more upside potential with this latest event than further bad news. The courts move so slow - and $2B is a LOT for the HRMC to just give up without a huge fight. Come on TCLL !

[trailorparkboy]

Traders set for Supreme Court after VAT appeal fails
Monday, June 7 06:30 pm
Sam Trendall Buzz Up! Print Story
A Court of Appeal ruling on several mobile firms VAT tussle has failed to provide Skip related content

the clarity expected, and the industrys battle with HM Revenue & Cust oms (HMRC) is set to continue through UK and European courts.

Calltel Telecom, Opto Tele links and Mobilx, now in administration, have previously battled HMRC in the High Court and a Tribunals process for more than £25m in combined VAT deductions. A fourth firm, Blue Sphere Global (BSG), was part of the same hearing, as HMRC appealed a tribunal ruling in the traders favour.

The case was the first to reach the Court of Appeal since the landmark Axel Kittel versus Belgium case in the European Court of Justice (ECJ). The Kittel case saw the ECJ rule that firms are ineligible to make tax deductions for transactions they knew or should have known were linked to fraud.

In a transcript of the appeal hearing, available from the British and Irish Legal Infor mation Institute, Lord Justice Moses stated that the earlier tribunal had applied the wrong test in seeking to ascertain whether traders should have known their trans act ions were more likely than not to be connected to fraud. However, the ruling against Mobilx was upheld.

The appeals of Calltel and Opto Telelinks were also dis missed, as was HMRCs app eal against the BSG decision.

CRN understands that Mobilx, Calltel and Opto Telelinks are to take their fight to the Supreme Court and the case could eventually end up in the ECJ. There are currently 800 similar cases awaiting tribunal or high court judgment in the UK, involving more than £2bn in VAT.

M Ali Akram, a VAT appeal specialist lawyer at Lexlaw Solicitors and Advocates, said the appeal hearing was something of a damp squib. But he added there were points of clarification traders could take away, such as the rulings assertion that the burden of proof lies squarely with HMRC.

The usual principle is he who asserts, must prove, and that has been very clearly stated by the Court of Appeal, he said.

Akram welcomed the possibility of a Supreme Court appeal, claiming UK legal tests are a higher hurdle than those applied in the Kittel case.

It is inherently unfair for HMRC to proceed against exporters and not the fraudsters directly, he said. It is imp or tant that the full weight of Supreme Court judicial attention is brought to bear on the actions of HMRC.

The appeal also directed tribunals to look beyond a firms due diligence proces ses and consider if wider business practices provide any real evidence of fraud. This was welcomed by Akram and Tony Guise, partner at VAT specialist Guise Solicitors.

A lot of things exporters do are perfectly good practices, said Guise. The judgment also clears up the burden of proof and makes it clear that the [HMRC] test is wrong.

Anthony Elliot-Square, managing director of the International Phone Traders web site, was underwhelmed by the appeal ruling.

It does not help anybody and skirts around the issues, he said.

HMRC continues to stigmatise mobile and CPU traders and cast doubt on the legitimacy of large portions of the industry, added Elliot-Square.

HMRC is using a back-door route to make people pay, he said. Basically this is legalised theft.

[Stock]

TCLL was waiting for other legal efforts to plow the road before they filed a case.

Better to let the big guys spend their money and set precedent, then come along with your own case. Less costly.

Give it a month or two.

[trailorparkboy]

It comes down to this, did they knowingly participate in the buy/selling of mobile equipment to other traders that formed a courisal (sp?). If they did they're guilty and we get nothing if not and where honestly making transactions with other traders then the outcome will be the same as blue sphere. The good news is it looks like cases are finally being processed, i dont know when tricell case comes up....if they drop the case, well we're screwed

[jking1999]

Again, thanks for your posts about what is going on in the courts. Still looks a lot bleaker to me than I previously thought, but now not as bleak as to be impossible.

Keep up the good work. It is greatly appreciated.

[trailorparkboy]

Traders have clearer position after Blue Sphere
Tony Guise provides a legal perspective on new cases that may involve VAT fraud

CRN, 03 Jun 2010
The Court of Appeal’s recent judgment in the joined appeals of Blue Sphere Global Limited (BSG), Mobilx Limited (Mobilx) and Call Telecom Limited and Opto Telelinks Limited (Calltel) brings a welcome restatement of the law – and helpfully sets out the correct approach to cases where traders have become unfortunately mixed up in a chain of transactions that at some point involved a fraudster.

Starting from basic principles, Lord Justice Moses (supported by Lord Justice Carnwath and Sir John Chadwick) reiterates the approach of the European Court of Justice to the issue of when HMRC may deny a taxpayer the right to deduct input tax.

"Kittel… enlarged the category of participants to those who themselves had no intention of committing fraud but who, by virtue of the fact that they knew or should have known that the transaction was connected with fraud, were to be treated as participants.

"Once such traders were treated as participants, their transactions did not meet the objective criteria determining the scope of the right to deduct."

The extent of such knowledge is therefore key, and in previous cases HMRC had sought to extend the scope of the test so that the right to deduct could be denied on the grounds that the trader “knew or should have known that it was more likely than not that transactions were connected to fraud”.

This is the wrong test
The Court of Appeal has made clear that this is the wrong test. The Court affirmed the first-instance decision in BSG that the right to deduct input tax may only be denied where the trader knows or should have known that the transaction was connected to fraud.

Traders who only might know the transaction was tainted by fraudulent evasion of VAT therefore cannot be regarded as a participant in that fraud.

So the trader’s state of mind needs to be considered carefully and the state of his or her mind is to be established, according to the Court of Appeal, by identifying that the only reasonable explanation for the transactions is the connection with fraud.

The long-running issue about who must prove the state of knowledge has also been settled. The Court made plain that if Customs wishes to allege a certain state of mind in the trader, it must prove it.

This echoes the approach of Briggs, J in the appeal in Megtian Limited (in administration), decided on 15 January 2010, where the Court indicated that it is for Customs to establish the state of mind of the taxpayer’s officers.

Of course that is after having identified him or her.

In the joined appeals, the Court of Appeal drew attention to the surrounding circumstances, which can help in establishing whether a particular officer should have known a transaction was connected with fraud.

Another relevant case
The decision of Brayfal Limited, decided by the First Tier Tribunal (Tax) on 3 March 2010, assists in this regard.

Judge Demack sat with two members. The members came to the view that Customs’ allegations about the trader’s state of knowledge were unfounded and summarised their views as follows:
• Lengthy experience of the mobile phone export business was a positive indicator for the trader
• The absence of trade references did not suggest knowledge of fraud
• Choice of insurer in any country of the trader’s choice was not suspicious
• Compliance with verbal contracts was not a suspicious way of doing business despite the lack of any written terms
• The use of FCIB as a banker was no cause for concern as at the material time no authority had taken any steps against FCIB
• Customer-driven transactions were not surprising and in fact were to be regarded as the norm
• The only equipment required for trading in mobile phones is a mobile phone and a fax machine
• The absence of credit terms is not suspicious but consistent with trade in this sector
• Low or non-existent credit ratings from credit agencies should not be taken as an indicator of suspicious activity. Any company trading mainly in cash would not expect any credit rating
• It is inappropriate to expect traders to carry out verification checks on other traders apart from those with which they deal directly
• Checking the validity of VAT numbers through Europa was perfectly acceptable
• The fact that stock was immediately available in the precise number, type and models is indicative only of typical business practice in the sector where product can be sourced at short notice.

Refreshing news for resellers
These recent decisions are refreshing for the reconnection they make with the correct law and commercial reality.

So far, the taxpayer has had a good year in the Courts, which makes prospective settlements with Customs more likely. Innocent traders will at last begin to recover most of the money they have been denied by Customs, without the cost and delay associated with litigation.

Tony N Guise is director at Guise Solicitors

[trailorparkboy]

Mobilx Ltd ( in administration) v Revenue and Customs Commissioners
Blue Sphere Global Ltd v Same
Calltel Telecom Ltd and another v Same
[2010] EWCA Civ 517; [2010] WLR (D) 124

CA: Carnwath, Moses LJJ, Sir John Chadwick: 12 May 2010

Where a trader had means of knowing that by his purchase he was participating in a transaction connected with fraudulent evasion of VAT he lost his right to deduct input tax but only when he knew or should have known that the transaction was connected to fraud. To lose his entitlement it was not sufficient that the taxpayer knew or should have known that it was more likely than not that his purchase was connected to fraud.
The Court of Appeal so stated when (1) dismissing the appeal of Mobilix Ltd (in administration) against a decision of Floyd J [2009] EWHC 133 (Ch) dismissing the company’s appeal against a decision of the VAT and Duties Tribunal that the company should have known that all its transactions were more likely than not to be implicated in VAT fraud; (2) dismissing the appeal of the Revenue and Customs Commissioners (“the Revenue”) against a decision of Sir Andrew Morritt C [2009] EWHC 1150 (Ch) allowing the appeal of Blue Sphere Global Ltd that the VAT and Duties Tribunal was wrong to have concluded that it was sufficient to prove that the company was involved in transactions connected with fraudulent evasion of VAT. The Chancellor held that it was necessary to prove the company ought to have known that by its participation it was participating in transactions which were connected with the fraudulent evasion of VAT; and (3) dismissing the appeal of Calltel Telecom Ltd and Opto Telelinks (Europe) Ltd against a decision of Floyd J [2009] EWHC 1081 (Ch) dismissing their appeals as taxpayers against a decision of the VAT and Duties Tribunal that they knew they were participating in transactions connected with fraudulent evasion of VAT. The Revenue had refused input tax credit claims on the basis that the traders knew or should have known that the transactions in which they were involved were or were likely to be connected with fraud. The tribunal upheld the refusals.
MOSES LJ said that the appeals related to the meaning of the test which the Revenue contended determined its right to refuse a taxable person’s entitlement to deduct input tax. The appeal turned on what the Court of Justice of the European Communities meant in Axel Kittel v Belgium; Belgium v Recolta Recycling (Joined Cases C-439/04 and C-440/04) [2006] ECR 1-6161, paras 59 and 61. The right to deduct may be refused if “it is ascertained, having regard to objective factors, that the taxable person knew or should have known that, by his purchase, he was participating in a transaction connected with fraudulent evasion of VAT.” Two essential questions arose: what the European Court of Justice meant by “should have known”, and second the extent of the knowledge which it must be established that the taxpayer had or ought to have had: was it sufficient that the taxpayer knew or should have known that it was more likely than not that his purchase was connected to fraud or must it be established that he knew or should have known that the transactions in which he was involved were connected to fraud? Once it was appreciated how closely Kittel followed the approach the court had taken six months before in Optigen Ltd v Customs and Excise Comrs (Case C- 354/03) [2006] ECR 1-483, it was not difficult to understand what it meant when it said that a taxable person “knew or should have known” that by his purchase he was participating in a transaction connected with fraudulent evasion of VAT. In Optigen the court ruled that despite the fact that another prior or subsequent transaction was vitiated by VAT fraud in the chain of supply, of which the impugned transaction formed part, the objective criteria, which determined the scope of VAT and of the right to deduct, were met. But the court limited that principle to circumstances where the taxable person had “no knowledge and no means of knowledge”(para 55). The court must have intended Kittel to be a development of the principle in Optigen. Kittel was the obverse of Optigen. The court must have intended the phrase “knew or should have known” which it employed in Kittel, at paras 59 and 61, to have the same meaning as the phrase “knowing or having any means of knowing” which it used in Optigen, at para 55. If a taxpayer had the means at his disposal of knowing that by his purchase he was participating in a transaction connected with fraudulent evasion of VAT he lost his right to deduct, not as a penalty for negligence, but because the objective criteria for the scope of that right were not met. It profited nothing to contend that, in domestic law, complicity in fraud denoted a more culpable state of mind than carelessness, in the light of the principle in Kittel. A trader who failed to deploy means of knowledge available to him did not satisfy the objective criteria which must be met before his right to deduct arose.
Perhaps of greater weight was the challenge based, in Mobilix and Blue Sphere, on the Revenue’s denial of the right to deduct on the grounds that the trader knew or should have known that it was more likely than not that transactions were connected to fraud. The question arose in those appeals as to whether that was sufficient or whether, as the Chancellor concluded in Blue Sphere, the right to deduct input tax may only be denied where the trader knows or should have known that the transaction was connected to fraud. In short, did a trader lose his entitlement to deduct if he knew or should have known of a risk that his transaction was connected to fraudulent evasion of VAT? The Revenue contended that the right to deduct may be denied if the trader merely knew or should have known that it was more likely than not that by his purchase he was participating in such a transaction. In his Lordship’s judgment the test in Kittel was simple and should not be over-refined. It embraced not only those who knew of the connection but those who “should have known”. Thus it included those who should have known from the circumstances which surrounded their transactions that they were connected to fraudulent evasion. If a trader should have known that the only reasonable explanation for the transaction in which he was involved was that it was connected with fraud and if it turned out that the transaction was connected with fraudulent evasion of VAT then he should have known of that fact. He might properly be regarded as a participant for the reasons explained in Kittel. The true principle to be derived from Kittel did not extend to circumstances in which a taxable person should have known that by his purchase it was more likely than not that his transaction was connected with fraudulent evasion. But a trader might be regarded as a participant where he should have known that the only reasonable explanation for the circumstances in which his purchase took place was that it was a transaction connected with such fraudulent evasion. Such an approach did not infringe the principle of legal certainty. On his Lordship’s interpretation of the principle in Kittel, there was no question of penalising the traders. If it was established that a trader should have known that by his purchase there was no reasonable explanation for the circumstances in which the transaction was undertaken other than that it was connected with fraud then such a trader was directly and knowingly involved in fraudulent evasion of VAT. The principle in Kittel, properly understood, was compliant with the rights of traders to freedom from interference with their property enshrined in article I of the First Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms. It did no more than remove from the scope of the right to deduct a person who, by reason of his degree of knowledge, was properly regarded as one who had aided fraudulent evasion of VAT. The appeals would be dismissed.
SIR JOHN CHADWICK and CARNWATH LJ agreed.