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HMRC internal manual

VAT Fraud

HM Revenue & Customs
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The Kittel principle intervention: Kittel in more detail: What is meant by ‘knew or should have known’: Actual knowledge

Rarely will direct and explicit evidence be available that the taxable person knew he was involved in a transaction connected with fraudulent evasion of VAT. However, actual knowledge may be inferred from a range of circumstantial evidence about the way in which the transactions have taken place that the taxable person ‘must have known’ that his transactions were ‘connected with fraudulent evasion of VAT’.