Jurisdiction(s):
United Kingdom

EWCA upholds HMRC power to deregister facilitators of VAT fraud despite legitimate supplies, applying Ablessio, where knew/should-have-known, subject to proportionality (Impact Contracting Solutions Ltd v HMRC)

Published on: 20 May 2025

Published by a LexisNexis Tax expert

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Article summary

Impact Contracting Solutions Ltd v HMRC [2025] EWCA Civ 623

This important case considers the ambit of HMRC’s power to cancel a taxpayer’s VAT registration where that registration is used solely or principally to enable fraud, and the taxpayer knew, or had the means to know, of such fraud, in line with the Ablessio principle as understood. The taxpayer, ICS, worked with mini‑umbrella companies to source labour and then supplied that labour to its customers, which were temporary work agencies at the time. HMRC regarded the arrangements between ICS and its customers as contrived and as having the result that those customers did not properly account for VAT. HMRC invoked the Ablessio principle to deregister ICS, on the basis that its VAT registration was being used to facilitate fraud. Because both HMRC’s decision to deregister ICS and ICS’s appeal against that decision took place before 31 December 2020, EU law applies to this case and governs the issues raised accordingly...

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