Microring Ltd v HMRC: Importance of Due Diligence in High-Value Transactions to Avoid VAT Fraud

• Microring Ltd operated a high-street jeweller and began dealing in large amounts of silver with no prior experience
• The company made back-to-back transactions with minimal checks on trading partners
• Microring claimed input tax of £310,184 related to purchases connected to MTIC fraud
• HMRC refused the claims, stating Micro knew or should have known about the fraudulent nature of the transactions
• The FTT dismissed the appeal, citing lack of due diligence, uncommercial transactions, and warnings from HMRC
• The decision emphasizes the importance of thorough due diligence in high-value transactions to prevent involvement in VAT fraud.

Source: rpclegal.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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