- Case Overview: The Ancient & Modern Jewellers Limited (A&M) case involved the applicability of the second-hand goods margin scheme for VAT, where HMRC assessed underdeclared output tax amounting to £5,474,249, later reduced to £5,004,595, due to perceived misuse of the scheme.
- Appellant’s Contentions: A&M argued that HMRC did not exercise best judgment in their assessments, claiming insufficient evidence and a lack of impartiality from the tax inspector, as well as alleging that the assessments were arbitrary and unreasonable.
- HMRC’s Defense: HMRC contended that their assessments were justified based on prior concerns from a 2014 inspection, asserting that A&M had deliberately misused the margin scheme by including ineligible goods and failing to conduct due diligence on suppliers.
- Decision and Findings: The First-tier Tribunal dismissed A&M’s appeal, concluding that the company deliberately submitted inaccurate VAT returns, did not comply with margin scheme requirements, and was involved in fraudulent supply chains, affirming HMRC’s assessments as conducted with best judgment.
- Penalties and Personal Liability Notice: The tribunal upheld the penalties against A&M, confirming that the director’s conduct warranted a Personal Liability Notice due to deliberate misrepresentation and the misuse of the margin scheme, reinforcing the importance of compliance in VAT reporting.
Source: marcusward.co
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.
