CTM’s Ongoing Success
CTM’s success is not just in one field, it is across the whole spectrum of HMRC disputes, involving VAT, income tax, PAYE, excise duty, penalties and much more. These successes have been in the First-Tier Tax Tribunal, Magistrates Court, High Court and Court of Appeal. Our clients range from small companies right up to those listed on the stock market.
Below is just a sample of our success throughout the UK in just the last 3 months, some involving complex legal arguments:
Link Distribution UK Limited (Bradford) – The company had been denied its VAT reclaim of £500,000. It was alleged that the company was connected to fraud in its supply chain and the directors knew, or should have known, of that connection.
Result – After substantial litigation, culminating in a 2-week Tax Tribunal hearing, we were successful and the VAT was repaid.
PA Gibbons Limited (Lincoln) – HMRC Seized a drilling vehicle/rig (valued at over £100,000) because it contained red diesel. In previous years, HMRC had allowed such vehicles to use red diesel but, in 2014, had changed its interpretation of the law. Businesses/other advisors accepted this change in interpretation, but, when CTM was consulted on the seizure, we felt that HMRC had misinterpreted the law and challenged this.
Result – The Magistrates court found that CTM’s interpretation was correct. They ordered the return of the vehicle.
QN Hotels Group (London) – QN Hotels received £350,000 of surcharge penalties as a result of paying its VAT late. QN had made payments each quarter that equalled the amount of each return, but HMRC allocated those to the arrears. HMRC believed that, as a creditor, they could allocate payments to arrears and then raise a penalty of 15% each quarter. We believed there was a strong (albeit new) argument on allocation and instructed specialist tax counsel.
Result – We were eventually successful in the Upper Tribunal (High Court).
Ulster Metal Refiners Limited (Belfast) – UMR were accused of knowing of a connection to fraud involving its wholesale Coca Cola business and had £450,000 of input tax denied.
Result – After 4 years of litigation, CTM successfully defended the allegation, but the judge found that UMR had knowledge of a different fraud. CTM did not believe the judge had the power to find a case that was not pleaded and we eventually overturned this in the Court of Appeal.
Other examples where CTM have appealed other cases to Tribunal and HMRC have withdrawn, given the strength of our arguments:
- A case where HMRC moved the PAYE and NIC contribution company debt onto the directors, because they said the directors had withdrawn funds that they knew could not be taken as dividend payments. This is a common allegation that can often be overturned.
- VAT Assessments issued out of time. HMRC can raise assessments for previous years, but only if they have not been in possession of the full facts for more than one year. We often come across such HMRC errors.
- Penalties for carelessness dropped through a lack of evidence. Again, HMRC routinely issue penalties for mistakes that are simply not careless.
- A company contacted CTM to manage an HMRC debt relating to a £100,000 VAT assessment on undeclared earnings. We quickly realised that the company was providing financial services that were actually exempt from VAT.
- We have also successfully challenged HMRC after refusals to grant AWRS and WOWGR registrations in the alcohol industry.