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HMRC internal manual

VAT Fraud

From
HM Revenue & Customs
Updated
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The Kittel principle intervention: Kittel in more detail: What is meant by 'fraudulent evasion of VAT': Where the fraudulent evasion of VAT is located

The Kittel principle (VATF52000) does not require the fraudulent evasion of VAT to be located in the EU Member State in which the purchase took place (e.g. the UK). Therefore:

  • where there has been fraudulent evasion of VAT outside the UK,
  • it can be demonstrated that UK transactions were ‘connected with’ that fraudulent evasion, and
  • that the taxable person ‘knew or should have known’,

then entitlement to the right to deduct input tax can be denied.

When seeking to demonstrate that the fraudulent evasion of VAT occurred outside the UK you need to ensure that the evidence fully supports your findings.

If you wish further guidance on establishing fraudulent evasion of VAT outside the UK please contact the VAT Fraud Team.