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

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? )

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

£8bn is at stake in major VAT case
February 15, 2010

By Devika Sen-Gupta (contact devikas@mobilenewscwp.co.uk)

UK interpretation of Brussels' 'means of knowledge' rule to be put to test; fight for £26.6m VAT in case that could influence £8bn tax held in Treasury

A controversial argument deployed by HM Revenue and Customs (HMRC) to detect VAT fraud in a chain of mobile phone transactions will be tested for the first time in the Court of Appeal, starting today (February 15).

The final decision could influence up to £8 billion of VAT reclaims from traders, reckon experts. The Court of Appeal hears HMRC’s case to withhold £26.6 million of combined input tax from traders Calltel, Opto Telelinks, Mobilx and Blue Sphere Global (BSG).

It will for the first time consider the UK government’s interpretation of part of the 2006 Axel Kittel ruling in the European Court of Justice. It will consider specifically HMRC’s perceived right to withhold VAT from traders under extended verification of their ‘means of knowledge’ of fraud in a supply chain.

Around 600 traders are waiting on verdicts from the VAT and Duties Tribunal still. The Treasury has withheld £4 billion-£8 billion of VAT from traders in total, according to legal experts.

An industry source close to the matter said: "Whilst the Court of Appeal is being asked to consider substantial points in relation to all three cases, it is also to consider the fundamental point that HMRC can introduce Kittel without first introducing legislation, as adopted by other EU member states. If HMRC is found to have acted in error, the UK Treasury could be liable for substantial repayments to traders."

An HMRC spokesperson said: "HMRC’s strategy has had a dramatic impact on levels of MTIC activity and subsequent losses. HMRC’s multi faceted approach has ensured losses have been kept well below their peak in 2005/06. In three years the impact of MTIC fraud on receipts per annum has been reduced by £1.5 billion-£2 billion."

Dass Solicitors partner Alias Dass (pictured top) said: "Traders are depending on this case to determine if theirs are worth fighting for."

Vantis head of tax Don Mavin (pictured bottom) said: "We anticipate the Court’s judgement will refine and clarify the way laws on fraud, means of knowledge and culpability are to be applied to such cases."

The case will be heard over a five-day period with a judgement expected in March.

Floodgates set to open in HMRC VAT conflict

Landmark case could see HMRC shelling out billions after senior judge rules refund policy is flawed

Written by Sara Yirrell

CRN, 28 May 2009

HM Revenue and Customs (HMRC) could be forced to shell out billions of pounds after a landmark case was won by a mobile phone trader accused of being involved in a fraudulent supply chain.

City law firm Thomas Cooper led a successful appeal in the Chancery Court in London, against the VAT and Duties Tribunal’s refusal to repay almost £1.5m VAT to Blue Sphere Global Limited, under the government’s unpopular Extended Verification scheme.

Sir Andrew Morritt, chancellor of the High Court, ruled last week that HMRC can no longer refuse to refund VAT to legitimate traders, in order to recover unpaid VAT by fraudulent traders.

Blue Sphere had unknowingly bought a consignment of mobile telephones from a contra-trader that had been involved in a fraudulent chain known as a ‘dirty chain’. However, Blue Sphere exported the phones in a ‘clean chain’, paying all duties required.

But HMRC decided that Blue Sphere’s VAT payment covered the missing amount in the dirty chain and refused to pay the money back.

Now the government department is facing the repayment, plus Blue Sphere’s legal costs, and Thomas Cooper solicitor Mark Whelan said there are at least 600 similar cases in the pipeline.

“This is not something that is going to go away. It is something that HMRC is going to have to deal with properly,” he said. “Instead of going for the soft targets like our client, HMRC is going to have to go after the proper criminals.”

An HMRC representative said in a statement: “HMRC is considering the implications of this judgment. HMRC is right to tackle fraud in this way – including where there is a contra scheme and we will continue to deny input tax where a trader knew or should have known that its transactions were connected with fraud. We will robustly defend our decisions in the courts.”

They will have to start cashing in Government Bonds then.Cause by the time you add interest plus 11 per cent late payment supplement plus damages and loss of business your talking millions in compensation!!

Time to get that cheque book out Mr Brown.

HMRC Powers Questioned in House of Commons

Posted: 15 July 2009


HMRC Powers Questioned in House of Commons

David Heath, MP for Somerset and Frome (constituency of Third Dimension Limited) agreed to raise our issues concerning the tactics employed by HMRC against the grey market in the House of Commons. He made a speech on Wednesday 8 July 2009 during the Finance Bill as a proposed amendment to the HMRC Charter.

The video of his speech can be found at the following location (you will need Flash installed to view it):

Click Here for Video of David Heath Speech

http://tdltest.tdlhosting.co.uk/video/

If UK MP's Were Treated Like Traders!

Posted: 26 June 2009


If UK MP's Were Treated Like Traders!

Following the revelations by the Telegraph of the widespread misuse of the expenses system by MPs, including Alistair Darling’s claim for his personal tax advisor and Gordon Brown’s “oversights”, ALL MPs are now tainted by this and perhaps all expense claims should be subject to an extended verification process, then their claims refused requiring an appeal by the individual MP to a Tribunal? Of course the MPs would have to pay for all the legal costs themselves and would have to carry the burden of cash flow and the possibility of having to cease being an MP until the appeal was resolved. The backlog of tribunal slots may mean a delay of 2 to 3 years before being heard. If the MP is successful, the authorities may refuse to accept the tribunal's decision and appeal to a higher authority, causing more delay.

Of course, this would be very unfair, but this is exactly what has happened to the legitimate traders caught up in HMRC's broad-brush campaign against the Grey Market. It was Gordon Brown who authorized the extended verification process, for which the legal basis is highly questionable. HMRC has relied on “tainting” everyone associated with the Grey Market in tribunal and it is time for the authorities to act to restore fairness to the system and support legitimate traders who’s alleged connection with an alleged fraudulent activity is so far removed that it is totally unreasonable to jeopardise the future of hundreds of businesses that have contributed so much for the UK economy.

I am starting to feel that our so-called Democracy and tradition for fair play is a farce. What happened to presumption of innocence before proven guilty?

A ‘Means of Knowledge’ Update

Posted: 08 June 2009


A ‘Means of Knowledge’ Update
By Don Mavin, Head of Tax Disputes & Litigation at Vantis, the UK accounting, tax and business advisory and recovery group.

Most industry commentators and observers agree that the High Court judgement in the cases of Livewire Telecom Limited (Livewire) and Olympia Technology Limited (Olympia) was a landmark in terms of both the manner in which similar cases were to be viewed and presented in the future, and also in setting out with welcome clarity the evidential and probative burdens which need to be discharged by the Commissioners of HM Revenue & Customs (HMRC).

The Livewire/Olympia judgement effectively put paid to HMRC’s tendency to rely upon nebulous, “overall fraudulent schemes” and ensured that, in future, there was a need to produce proper and cogent evidence in support of any allegation of fraud.

Although there remains the unfinished business of the fifteen alleged “linear” Missing Trader Intra-Community (MTIC) frauds to be settled in the Olympia case, with those matters having been sent back to the VAT Tribunal for reconsideration, there is no doubt that both Appellants and HMRC have, as a direct result of Livewire/Olympia, a much more sharply defined set of rules with which they must comply if they wish to win the day before the Tribunals.

As is the way with litigation of this type, however, the landscape is ever changing, and with each new Tribunal decision or High Court judgement, the legal template changes, and every new case brings with it additional points which must be incorporated into future VAT MTIC appeals.

In recent weeks, there have been two more such judgements, (involving three companies), handed down from the High Court. The companies had previously lost their appeals before the VAT Tribunals, but there, the similarities end.

The Appellants in question – Blue Sphere Global Limited (BSG), and the associated companies, Calltel Telecom Limited and Opto Telelinks (Europe) Limited (Calltel) came away from the High Court with markedly different results.

VAT Ruling Could Cost Exchequer Billions

Posted: 26 May 2009


VAT Ruling Could Cost Exchequer Billions

Leading City Lawyers Thomas Cooper successfully appealed in the Chancery Court today, against the VAT and Duties Tribunals refusal to repay VAT paid by Blue Sphere Global Limited to its supplier on the purchase of mobile telephones.

Nicholas Green, partner in Thomas Cooper, commented: 'The Blue Sphere case has severely damaged HMRC's approach to these cases, and claimants involved in missing trader frauds litigation will be greatly encouraged by this. The government can no longer penalise legitimate traders in order to regain money owed by unconnected fraudsters.'

For the full article written by Thomas Cooper Solicitors (Solicitors of Blue Sphere Global Ltd)

For full article please click here

Also for information about the ame subject and case - see below:

Blue Sphere Global Ltd v Revenue and Customs Commissioners

Blue Sphere Global Ltd v Revenue and Customs CommissionersCitation[2009] All ER (D) 213 (May)
Alternative Citations[2009] EWHC 1150 (Ch)
Hearing Date22 May 2009
CourtChancery Division
JudgeSir Andrew Morritt C

Representation Michael Patchett-Joyce and James Rickards (instructed by Thomas Cooper) for the taxpayer.Melanie Hall QC and Jonathan Hall (instructed by Howes Percival) for the Revenue.

AbstractValue added tax – Input tax. Chancery Division: The taxpayer company's appeal against a decision of the VAT and Duties Tribunal in which the tribunal upheld the Revenue and Customs Commissioners' refusal to repay the input tax incurred by the taxpayer was allowed on the basis, inter alia, that the tribunal had been wrong to have concluded that the taxpayer ought to have known that by its purchases from the relevant third party company, it had been participating in transactions connected with fraudulent evasion of VAT.

All Bets Are On For This One !! Buy Your Lotto Ticket Here !!!

Livewire wins appeal in High Court – Don Mavin

Posted: 16 January 2009


Livewire wins appeal in High Court – Don Mavin, Vantis

In an eagerly awaited judgement, the High Court has today dismissed Her Majesties Revenue & Customs (‘HMRCs’) appeal against the Tribunal decision in the Livewire case. This represents a landmark victory for our client, and will undoubtedly benefit many others who have their VAT withheld or under appeal before the VAT Tribunals.

The High Court has also found in favour of Olympia with regard to those transactions which formed part of a contra trading fraud. The so-called ‘linear’ transactions have been referred back to the VAT Tribunal for reconsideration, since the High Court found that the Tribunal was wrong to decide that the state of knowledge of an individual director should be considered when determining a company’s means of knowledge of a VAT fraud. The knowledge attributed to a company must involve not only the directors, but its senior employees.

However, businesses alleged to be implicated in both varieties of Missing Trader Intra-Community (‘MTIC’) fraud will find much to cheer about in today’s judgement.

Mr Justice Lewison has laid the basis for a new framework against which this litigation will be fought and determined in the months to come. HMRC will no longer be able to assert the transactions in question formed by part of an overall scheme to defraud the revenue without proving the specific fraud and its connection to the Appellant’s transactions – whether that be a contra fraud or a linear fraud. This is an argument which has long been resisted by HMRC.

In addition, the issue of due diligence – which has so long been central to any VAT appeal of this type – has finally been given its proper status. A company’s due diligence must be reasonable, thorough and represent proportionate enquiry. As any trader can confirm, HMRC has ranged far and wide in what it considers constitutes proper due diligence. Mr Justice Lewison puts the matter in terms which will give comfort to every victim of HMRC’s extended verification policy:

‘The taxable person does not owe a ‘duty’ to take precautions (unless it is a duty to himself). The taking of all reasonable precautions (and acting on the basis of what he discovers as a result of taking those precautions) provides him with an impenetrable shield against any attack by HMRC.’

The High Court judgement fully endorses our arguments before the Livewire Tribunal by finding that a company whose due diligence is deficient may still receive a VAT repayment if the circumstances are such that a connection to fraud would not have been discovered even if the due diligence had been perfect.

Once again, this is a welcome return to the real world in which commercial decisions may involve a degree of risk, and it may be impossible to conduct the sort of checks which HMRC has required in the past – although, as Mr Justice Lewison points out, HMRC itself seemed unwilling or unable to indicate precisely what those checks may be.

However, a note of caution must be sounded here. Due diligence remains extremely important, and appeals will still be lost if Appellants are unable to demonstrate to the Tribunal that they not only undertook every reasonable check expected of them, but also acted positively upon the information those checks revealed. A negligent trader will still be subject to adverse comment and a line must be drawn between acceptable commercial risk and indifference to the dangers of fraud. A recent contra trading case was lost before the Tribunal because of deficiencies in the trader’s due diligence and a perceived lack of commerciality in the transactions.

In the future, if HMRC wishes to rely upon an allegation of knowledge of contra trading, then it will be required to prove that the business it says is the contra trader is acting as a “dishonest co-conspirator”, and is demonstrably taking steps to cover up the fraud being committed by the missing trader.

This will, inevitably, raise the evidential bar for HMRC, and may require it to take action against the contra traders – in spite of the fact that its activities have not led directly to any VAT losses. The burden of proof becomes more onerous still for HMRC as Mr Justice Lewison makes it clear that HMRC’s assumption that, in a contra case, both the clean and dirty chains are part of an overall fraudulent scheme must be proven on the facts of each individual case.



This judgement inflicts severe damage upon HMRC’s current reliance upon a trader’s general knowledge of fraud as being, in itself, an indicator of knowledge of the particular fraud alleged to have taken place. There must be a far more evidentially rigorous approach from HMRC than that which it has deployed to date. The so-called “fraud indicators”, or “objective factors” relied upon at present do not constitute proof of knowledge in themselves, but are merely elements from which conclusions are to be drawn.

For example, a lack of insurance may not be viewed as probative evidence of knowledge of a fraud unless it is accompanied by the question: “Would taking out insurance have alerted the trader to the existence, or even the possibility of this particular fraud?”

The overall message therefore is that every constituent part of a contra or linear case needs to be proven and looked at separately – harking back to the European Court of Justice’s finding in Optigen et al, that it is not acceptable simply to view such matters as a whole.

It is likely that HMRC will seek to stand all of its cases over in order to afford the chance to digest this judgement, during which time we expect there will be a serious review by HMRC’s legal and technical divisions of all cases on hand - both of those in which a decision has yet to be notified to the trader and those which are already under appeal. Cases which are well advanced in the Tribunal system may need to be re-evaluated in order to determine whether they remain viable prospects, but any withheld VAT is only likely to be released by HMRC if it considers the facts of the case are on all fours with Mr Justice Lewison’s Judgment and relevant Tribunal Decisions, and where all other tax liabilities of the trader have been confirmed and resolved. There may also be Decisions in earlier cases which need to be reviewed in the light of this Judgement.

Statements of Case and decision letters from now on may well look different – for both contra trading and linear cases. Mr Justice Lewison’s constant references to conspiracy, ‘the real world’ and his insistence on breaking down the constituent parts of a fraud are extremely good news for the future conduct of appeals, and it is to be hoped that traders can now look forward with a degree of optimism that their cases – if properly prepared and presented – will benefit as a result of this landmark judgement.

Don Mavin

Means of Knowledge Success!

Posted: 18 August 2008

Means of Knowledge Success

Dass Legal Update - Friday, 15 August 2008

Dass Solicitors are extremely pleased to announce that we have been successful in, what we believe is, the first refusal of a VAT case since March 2006 where HM Revenue & Customs have agreed to repay the monies. We can confirm that the VAT has now been repaid to the client and legal costs have been received.

For purposes of client confidentiality, we are unable to disclose the name of our client. However, the facts are as follows:-

1 we have been instructed by this particular client for approximately two years in what has been a long hard legal battle;

2 we were instructed to issue judicial review proceedings following the extended verification process which prompted HMRC to disallow the claimed VAT;

3 the appeal to the Manchester VAT & Duties Tribunal has, as most of these cases are, been detailed and difficult with many very serious allegations against our client having been made by HMRC;

4 following the long drawn out litigation HMRC were forced to concede the appeal shortly before the hearing thereby precluding any potential appeal. As a result HMRC have now repaid the claim in full to our client.

It is our understanding that this is the first time since the extended verification process started that HMRC have actually repaid disputed amounts to an appellant in Tribunal Proceedings.

This is the clearest indication that these cases are winnable if prepared properly and meticulously.

If you would like to discuss any issues in relation to refusal of VAT by HMRC please contact the following:-

Birmingham Office

1 Mr Robert Holland – 0121 248 4000 or 07787 511587
kayley.twigg@dass-solicitors.com

Its going to take some time. Tricell will have to go to the Tribunal courts in the UK , Then should they be successful HMRC will probably appeal , so it will end up in the European courts where the final decision will be made. I still think we are perhaps 12 mnths away but without news from Tricell I cant be sure.

EU rules on HMRC's 'extended verification'

Posted: 28 July 2008

EU rules on HMRC's 'extended verification'

July 28. 2008 - Mobile News International

European Court of Justice ruling puts pressure on HMRC's policy of extended verification. The policy of HM Revenue and Customs (HMRC) of withholding VAT refunds for up to two years while carrying out anti-fraud enquiries has been put under pressure by a new European Court judgment that tax offices should not withhold refunds for more than two months for an established trader.

The European Court of Justice was upholding a case brought by a Polish trader who had his VAT claim withheld pending extended verification without a decision being made.

The case was referred from the Polish court to the European Court of Justice. It decided that 180 days was a reasonable amount of time for the authorities to carry out enquiries into a newly-registered trader, reducing to 60 days in the case of an established trader.

The ECJ also said it was not appropriate for the Polish authorities to insist on a security deposit being lodged.

The Judgment of the Court sets a precedent for UK traders to challenge extended verification periods of up to two years imposed in the UK by HMRC.

The Court agreed member states had a legitimate interest in preventing tax evasion and abuse.

But it said such measures "must be in accordance with the principle of proportionality" and "employ means which, whilst enabling them to effectively to attain such an objective, are the least detrimental to the objectives and principles laid down by the relevant Community legislation, which include the fundamental principle of the right to deduct VAT".

Vodafone Wins £2bn Tax Battle

Posted: 07 July 2008

Vodafone Wins £2bn Tax Battle
By Vanessa Houlder and Megan Murphy - Financial Times

Published: July 5 2008

The world's biggest mobile phone group has won a billion-pound battle with Revenue & Customs over the tax on one of its foreign subsidiaries.

The High Court yesterday ordered Revenue & Customs to close a long-running inquiry into Vodafone's 2001 tax return after ruling that it would be unlawful to apply UK rates of corporation tax to a subsidiary based in Luxembourg.

Vodafone, which set up the unit as part of its 1999 acquisition of Germany's Mannesmann, had estimated the cost of losing the case at more than £2bn.

The judgment is a setback for the Treasury in its confrontation with multinationals over their ability to shift profits to lower-tax jurisdictions.

Its desire to tighten anti-avoidance rules has prompted threats by several large companies to move their tax domicile overseas.

Bill Dodwell of Deloitte said that, while he expected the financial impact of the case on the Treasury to be limited, the decision was embarrassing. "It is un-doubtedly a setback."

The ruling is also likely to strengthen the incentive for the Treasury to sweep away its "controlled foreign company" legislation, which imposes tax on subsidiaries in low tax countries.

It has already proposed replacing the CFC rules, in an effort to shore up its defences against avoidance if it goes ahead with plans to allow the tax-free repatriation of foreign profits.

Revenue & Customs said it would appeal: "The government will continue to defend its ability to enforce the CFC rules, which are designed to counter tax avoidance through artificial shifting of profits to offshore subsidiaries."

Vodafone's victory will come as a relief to other multinationals facing disputes with Revenue & Customs over anti-avoidance rules. Advisers said a number of UK-based multinationals have financing structures in European Union countries, notably the Netherlands, Ireland and Luxembourg, which have been challenged by Revenue & Customs on the grounds they did not comply with the CFC rules.

Revenue & Customs is now bogged down in arguments with multinationals over the stringency of its proposed alternative, which would bring passive income - such as royalties and intellectual property - into the tax net. The Treasury is considering issuing an update on its thinking later this month, but a full consultation paper has been postponed pending further discussions with business.

Yesterday's ruling, over Vodafone's tax returns for the year to March 2001, concerned legislation which has since been amended.

But Mark Persoff of Clifford Chance, the legal firm, said the judgment cast doubt on the efficacy of minor changes made to the CFC rules after a 2006 European Court of Justice case involving Cadbury Schweppes. This ruled that anti-avoidance rules could only be allowed to interfere with businesses' freedom of establishment in the EÛ if they were proportionate and only attacked wholly artificial arrangements.

"The High Court has expressed 'some doubt' as to the efficacy of sticking plaster amendments introduced in 2006," Mr Persoff said. "This means, as matters now stand, the UK probably has no enforceable CFC legislation so far as EU/EEA subsidiaries are concerned."

No More News At The Moment Other Than What Is In The Domain Already.
I Do Here This Is Going To Take A Very Long Time To Sort Out.

Jking1999 No Problem Hopefully Tricell Will Have A Day In Court Anytime Soon And Then We Can Really Celebrate With A Bit Of Luck.


All The Best

Fantastic News Enjoy



All The Best

HMRC Appeal to High Court dismissed on all grounds

Posted: 17 March 2008

BRAYFAL T/A DRK - v – HMRC

HM Revenue & Customs' Appeal to the High Court dismissed on all grounds – March 2008

The Khan Partnership LLP have successfully fought against HMRC’s appeal to the High Court in London, which they brought against a decision of the VAT & Duties Tribunal refusing to allow HMRC to adduce further evidence during the hearing of an appeal by Brayfal Limited t/a DRK in Manchester in January 2008.

Mr Justice Lewison immediately handed down Judgment on 4 March, 2008. After a two day hearing before him in the High Court, he dismissed HMRC's appeal on all six grounds. He stated in summary; “I find it impossible to say that the Tribunal have made an error of law ". He ordered HMRC to pay Brayfal 100% of its costs in relation to the High Court Appeal.

The Judgment provides useful commentary on the importance of proper disclosure by the HMRC both generally and particularly in relation to MTIC matters and demonstrates the effectiveness of the pro-active and robust approach taken by The Khan Partnership LLP (formerly Hassan Khan & Co Solicitors) of repeatedly forcing the Commissioners’ compliance with Tribunal directions and the need for proper and early disclosure of the cases traders are required to answer to.

Would be nice to know at least when Tricell's day in court is or if they have already been. A statement guys please ??

Lawyer claims HMRC's 'phoney' VAT war is over

Hassan Khan

Monday 10 March 2008
HM Revenue and Customs (HMRC) has been defeated for the second and third time in quick succession in the VAT and Duties Tribunal.

The verdicts have caused panic within HMRC and it has, at huge cost, appointed forensic accountants KPMG to bring evidence on its behalf in future tribunal and High Court hearings.

Suddenly, the log-jam of appeals by traders against HMRC over withheld VAT payments has started to go before the tribunal, and traders are starting to win landmark decisions.

Hassan Khan, of VAT lawyers The Khan Partnership, said: “It’s a good psychological boost to the industry and shows the tribunal is independent, and not afraid to find against HMRC.

“This is a crunch time. The first few cases are now through and traders are winning some of them. The phoney war is over.”

‘Means of knowledge’

At the end of February, mobile phone trader Olympia won its appeal against HMRC for around £1.8 million in withheld VAT repayments. HMRC’s ‘means of knowledge’ argument, for the second time in two months, fell down as the tribunal rejected its contentious claims a grey market does not exist and that foreign-sourced handsets are a clear indicator of VAT fraud in a supply chain.

HMRC indicated last week it would appeal the Olympia decision and join it with its appeal of the Livewire decision in January, which saw the tribunal order HMRC to repay £2.3 million in VAT to Livewire.

Also late last month, the tribunal rejected HMRC’s late submission of evidence in its case against trader Brayfal, which has a £1.5 million VAT reclaim held up by HMRC.

HMRC has appealed the tribunal’s decision not to allow late submissions of evidence (a tactic HMRC has used in tribunal hearings) to the High Court.

This appeal was heard within the last week in front of Judge Justice Lewison who delivered his decision in favour of Brayfal.

Since January 2006 HMRC has stopped all VAT repayments to all mobile phone and computer chip traders.

Prior to the Livewire case, not a single mobile phone or computer chip trader had seen a VAT repayment since June 2006. HMRC’s policy has been to refuse to make decisions to disallow VAT repayments at all.

Instead it has withheld VAT indefinitely in order to carry out its investigations into traders’ supply chains.

Traders have been forced to appeal HMRC’s actions to the High Court, at which point HMRC has produced decision letters to withhold VAT payments on the grounds of ‘means of knowledge’ and diverted appeals back through the VAT and Duties Tribunal.

Only since January have the first cases started to go before the tribunal.

Sign it anyway as a shareholder and use the companies address.
Im sure that will be fine.At the end of the day we have all been affected by this action taken by HMRC and have every right to appear on the petition.

All The Best

Sign The Petition As Shareholders.We Can Do Our Bit For The Company.

All The Best

Petition the Prime Minister to REPAY VAT Reclaims!

Posted: 29 February 2008


Dear Trader,

Monty Jivraj has created and filed a new 10 Downing Street Online Petition. We would appreciate your support in signing it.

About the petition - HM Revenue and Customs’ (HMRC) Extended Verification strategy is an ‘inefficient and unsustainable’ use of resources and has imposed a ‘significant burden’ on UK businesses. We ask urgently the Prime Minister and the Chancellor to take urgent action and repay businesses in UK who are suffering in the hands of HM Revenue and Customs. Even when The VAT Tribunal has ruled in favour of the appellants, HM Revenue and Customs continue to ignore the fact that its strategy is having an adverse effect on the whole telecoms industry and that a huge number of innocent businesses have been brought to their knees financially as a result because they cannot simply fight an organisation as large and powerful as HM Revenue and Customs and the firms are hugely affected to the extent it will be extremely difficult to start rebuilding their shattered and destroyed business once more.

We ask you to please instruct all your employees, colleagues and the directors of the company sign the petition individually.

Please fill the petition with your correct name and the company name you represent. For example – John Smith – A Telecom Ltd. (In previous petitions it has not been possible to use the data as only names were added – not the companies they represent.)

Additional Information

To assist us put together a detailed response; please also complete this Web Form with all details.





The link to the web form is - http://www.ipt.cc/WebPetition/index.html

The link to the petition is - http://petitions.pm.gov.uk/InputTax/


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Posted: 28 February 2008


OLYMPIA TECHNOLOGY LIMITED - JUDGEMENT DECISION

Click here for full judgement

Olympia Technology Ltd have successfully fought their appeal in the VAT and Duties Tribunal.

HMRC denied Olympia the right to deduct input tax of £1.7m on the grounds of means of knowledge. It was alleged by HMRC that Olympia had fraudulent tax losses in some of their supply chains and also tax losses in other chains involving a contra trader and an overall scheme.

The Tribunal ruled that in spite of the existence of fraud, in Olympia’s supply chain, there was no evidence that they knew or should have known of it’s existence, and since HMRC did not evidence the 'contra' trader in the other chains had actual knowledge of the scheme then Olympia could not be denied the right to deduct on the grounds of means of knowledge.

The Tribunal ordered HMRC to make the repayment with costs and interest.

This is a very important victory which gives genuine hope to all in our industry who find themselves in a similar position. It also emphasises the importance of a properly prepared case, and professional representation.

Our congratulations to both Olympia and their legal team.

Fred Howarth
Chairman FTI

From What I have Read So Far Each Tribunal Case Will Be Heard On Each Individual Merits.So Long As Tricell Has Done Nothing Wrong There Is Nothing To Fear. The Outcome At High Court Will Be Judged On Facts And I See No Reason Why Livewire Shouldnt Succeed Once Again On The Same Basis.This Appears To Be Yet Another Delay Tactic By HMRC To Repay Monies Owed.
This However Could Be Several Months Down The Line In Realistic Terms. I will In The Meantime Find Out More.

The Upside Is The Lawyers Involved Are Confident Of A Victory. On That Point Tricell's Lawyers Must Feel The Same Way To Enter Into A No Win No Fee Arrangment.

Livewire Telecom Tribunal Case to be Appealed

Posted: 05 February 2008

As most of you will be aware, on 10 January 2008, the VAT & Duties Tribunal handed down its judgement in the Livewire case. It was a 'means of knowledge' case in which the Tribunal found in favour of the taxpayer and ordered HMRC to repay denied input tax. It is now clear that HMRC will not do so and have confirmed in open Court that they intend to appeal against the Tribunal decision to the High Court.

Friday 1 February 2008
A landmark VAT and Duties Tribunal decision last week saw HM Revenue & Customs (HMRC) for the first time defeated on its interpretation of 'means of knowledge', which has underpinned its strategy for combating missing trader frauds since 2006.

The ruling will also have a bearing on up to 1,200 appeals by thousands of traders still to be heard. Hundreds of millions of pounds is still being withheld from traders by HMRC.

Mobile phone trader Livewire Telecom won its appeal for more than £2 million in withheld VAT. It is the fifth such case to go to the VAT Tribunal, but the first to find in favour of the trader.

The VAT Tribunal said HMRC had been loose in its interpretation and use of ‘means of knowledge’ assessments, by which it has withheld VAT from traders on the grounds they “knew or should have known” about fraud in a supply chain.

‘Means of knowledge’ assessments have been employed by HMRC as a part of its ‘extended verification’ tactic for withholding VAT from traders since the European Court of Justice ruled it was grounds for non-payment in the Axel Kittel and Ors case in July 2006.

But the VAT Tribunal in this instance overturned HMRC’s interpretation of ‘means of knowledge’.

It criticised HMRC for its application of the Kittel doctrine and said traders should not be required to police the supply chain for VAT fraud.

Martin O’Neill, senior consultant at Vantis Tax, which handled the case for Livewire, said: “This is a terrific result for Livewire and for other traders caught up in the lengthy extended verification exercise carried out by HMRC. It will also have a marked effect on future cases.

“It puts to rest a number of incorrect assumptions which HMRC has made in its interpretation of the Kittel judgment. It allows the taxpayer to challenge the grounds for the extended verification.

“Until now, a decision as to whether a company had knowledge of a fraud was largely based on the opinion of an HMRC officer.

“There was very little in the way of legal framework and even less case precedent upon which to base this decision, or appeal against it.”

The Livewire case concerned wholesale transactions dating from April 2006, where Livewire purchased and exported 14 consignments of mobile phones.

The resulting VAT repayment, of more than £2 million, was subjected to extended verification by HMRC and repayment was denied in December 2006. The VAT Tribunal hearing started in November last year.

HMRC was unavailable for comment. It could appeal the decision to the High Court.
Vantis Tax managing director Don Mavin said: “HMRC will have to review its stance in light of this decision.”

The Livewire Decision: What Next for the Industry

Posted: 22 January 2008


The Decision

The decision in Livewire Telecom is a clear indictment on HMRC’s loose application of the rules of evidence in attempting to prove fraud (even on the civil standard) and apply the test of means of knowledge of that fraud by traders.

It also serves as a significant acknowledgment by the Tribunal of the approach that has been advocated by Ashton Law LLP throughout 2007. The decision confirmed that HMRC have a very difficult task in evidencing the facts required to prove means of knowledge as proscribed in the ECJ case law. However, the policy adopted by HMRC of attacking the exporters to attempt to stem the flow of fraudulent proceeds from the VAT system was never sanctioned by the English Courts, although the High Court had stated that it was a tool available to HMRC. That statement never declared it to be the best and only weapon in HMRC’s arsenal. HMRC were clearly under the mistaken confidence that the policy would be approved by the judiciary.

I totally agree with you there.

Congratulations Vantis PLC & Livewire Telecom Ltd

Posted: 18 January 2008


Ashton Law would like to reiterate its congratulations to Vantis PLC, Livewire Telecom Ltd and Essex Court Chambers on their excellent result at the VAT & Duties Tribunal. At long last, the industry has a reason to be optimistic as this decision will have implications for many other traders whose claims for unpaid VAT is the subject of pending litigation. As we have said previously, the decision has shown that credible traders whose cases exhibit a strong factual pattern have nothing to fear from the Tribunal process. The Chairman in the Livewire matter has arrived at his decision through a careful analysis of the facts, showing that it is possible to defeat Customs' cases which, in a large number of instances, are based on supposition and conjecture. Given this apparently excellent news, traders are urged to redouble their efforts and fight for the return of their funds.

No Problem. Im trying to find out the status of Tricell's Tribunal. Just hoping they are having one soon as it seems they will follow suit. I will try to find out if they are listed to be heard in manchester or London Tribunal courts.
Let you know if I find anything.Good luck.

An update from Tricell's Management regarding Legal Proceedings would be nice right now.Seems the tide has turned in the courts and there is some light at the end of the tunnel here.
Best of Luck.

Livewire Telecom Ltd's - Success in VAT Tribunal

Posted: 17 January 2008


Livewire Telecom Ltd’s success in its appeal to the VAT Tribunal

Vantis Tax is pleased to announce that the VAT appeal conducted by this firm on behalf of its client, Livewire Telecom Ltd (‘Livewire’), has been successful and the VAT Tribunal has overturned HM Revenue & Customs’ (“HMRC’s”) decision to deny a VAT repayment to Livewire, a mobile phone wholesale company. This landmark ruling is extremely significant as it is the first case in which a decision by HMRC that a company “knew or should have known” about fraud in a supply chain has been overturned by the VAT Tribunal. Livewire’s case concerned a specific allegation of VAT losses allegedly disguised by so called “contra trading”. However, the implications of this decision for the hundreds of companies who have had their repayments denied, or withheld, in similar circumstances will be extremely far-reaching, and a number of the Tribunal’s key findings will have a marked effect upon future cases alleged to involve defaulting or missing traders.

Good Luck to Livewire - Tribunal Decision

Posted: 11 January 2008
Note : If the right decision is reached here this is very good news for Tricell Inc. I will post the decision as soon as it becomes available.Many Thanks guys and good luck.

Good luck from Ashton Law to Livewire Communications whose Tribunal decision is expected imminently.



Ashton Law firmly believe that appellants such as Livewire should and will be successful in their appeals before the VAT & Duties Tribunal. As we have long contended, experienced Tribunal Chairman properly applying the relevant tests set out in Kittel to the individual facts will inevitably conclude in the appellant’s favour.

Hopefully 2008 will see the tide turning in favour of genuine appellants and we look forward to working with many such clients

ECJ tells Customs to repay traders VAT

Dass - "if traders carry out the right procedures, they cannot be responsible for VAT fraud"


Friday 12 October 2007
The European Court of Justice (ECJ) said last week that HM Revenue & Customs (HMRC) should repay around 18 million pounds in withheld VAT to UK traders.

HMRC has withheld VAT from around a dozen UK traders since 2002. The long-running UK litigation – which carries the name of the biggest trader, Teleos – was referred to the ECJ on a technicality, to decide whether documentation for the export of goods was sufficient for traders to reclaim VAT or whether goods needed to physically leave the UK for traders to claim repayments.

The group of UK traders supplied Spanish company Total Telecom, which instructed them to transport the goods to a UK freight-forwarder called Euro Sellers. Total Telecom said it would arrange with Euro Sellers for the transport of the goods out of the UK.

The ECJ said that, as far as the UK traders could discern, they had received the correct documentation from Euro Sellers and applied to HMRC for VAT repayments. When HMRC investigated, it discovered the stock never left the UK and withheld VAT from the traders for their involvement in a carousel fraud.

But the ECJ ruled that the documentation obtained by UK traders was sufficient. It said they conducted themselves correctly, had no reason to suspect the onward involvement of their goods in a VAT fraud, and had fairly believed the veracity of the export documentation.

Alias Dass, a solicitor at Dass Solicitors who has been involved with the case, said: “Until now, HMRC has argued that, unless goods physically leave these shores, it is right to withhold VAT. This decision says that, provided traders have carried out the right procedures, they cannot be held responsible for VAT fraud.”

Pending a UK court ruling, HMRC must release £18 million in VAT, as well as pay a repayment supplement of five per cent of the total monies withheld, plus interest and legal costs to traders.

Traders who are unwittingly caught up in a carousel fraud chain yesterday won a significant victory at Europe's top court.

The European Court of Justice said that if they had acted in good faith and could show that they had taken "every reasonable measure" to ensure that they did not deliberately participate in tax evasion, the tax authorities should not be able to withdraw any value added tax exemption rights they held

(Extract from the article )

From Fridays Financial Times UK Edition. This sets a new precedent and it seems even more likely the VAT cash will come back,its now just a matter of time.There is no legal arguement or basis in European Law for HMCE to keep the money indefinately especially as there is no allegation of wrong doing at Tricell.This may explain the volume on Friday ? Either way these shares are a bargain and looks like they are set to explode !!!

http://www.ft.com/cms/s/0/02f41842-6d5e-11dc-ab19-0000779fd2ac.html

Here Is an article on Tricell From a Local News Paper

http://www.thisisstaffordshire.co.uk/displayNode.jsp?nodeId=158338&command=displayContent&so...