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HMRC internal manual

VAT Fraud

Basic interventions: output tax interventions: refusing zero rating of dispatches and exports where there is connection with fraud: the Mecsek principle: can I deny input tax using Kittel and zero rating using Mecsek?

The answer to this will depend on the circumstances of the case.

If the only fraud identified is that of the taxable person’s customer then generally the Mecsek principle only would be applied.

There may, however, be circumstances where there is more than one fraud in the supply chain. In such instances you will need to determine whether the taxable person ‘knew or should have known’ of each of the frauds.

If you require assistance in determining which intervention to use please contact the VAT Fraud Team.