Construction Firm Wins VAT Fraud Case, Avoids £187,248 Penalties

A tribunal found construction firm BSCL did not generally know, and should not have known, that most of its transactions were linked to VAT fraud under the Kittel principle.
HMRC had assessed BSCL for £624,162 and issued £187,248 in penalties, but these were largely cancelled on appeal.
The case centered on whether BSCL should have detected fraud among its suppliers, after HMRC sent warning (“veto”) letters about deregistered suppliers.
The FTT rejected HMRC’s arguments about invoice details and changing bank details, noting BSCL lacked prior VAT fraud experience and had received no specific warning.
One exception remained, but overall the tribunal mostly sided with BSCL.

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.