FTT Upholds Director’s Liability for Input VAT Denial Under Kittel Principle in Butt v HMRC

• Mr Butt’s appeal against a director’s liability for a company penalty due to denial of input VAT under the Kittel principle was dismissed by the FTT.
• The FTT found Mr Butt had “blind-eye” knowledge that Quantum’s transactions were connected to fraudulent VAT evasion, based on his actions, omissions, and prior warnings from HMRC.
• Mr Butt failed to implement adequate due diligence and ignored red flags, despite extensive education from HMRC and a history of involvement in similar fraud with another company.
• Even if blind-eye knowledge was not proven, the FTT held Mr Butt had the means of knowledge to be aware of the fraud.
• The FTT rejected Mr Butt’s arguments regarding penalty calculations and claims of non-discrimination or HMRC profiting.

Source: claritaxnews.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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