HMRC have long relied on the Kittel principle in cases of alleged missing trader fraud in relation to VAT. Using Kittel, HMRC contest that a trader ‘knew or should have known’ that the transactions being entered into were connected to fraudulent activity. Cases going through the courts demonstrate that Kittel has a much lower threshold than proving that a trader deliberately defrauded HMRC, and therefore has more likelihood of success.
Source: Mazars
