It has been common knowledge for some years that the UK Tax Authorities, HM Revenue & Customs (‘HMRC’) do not like a level playing field when litigating with alcohol traders or commodities associated with Missing Trader Intra Community Fraud (‘MTIC’).
The traders they commonly deal with are companies, mostly incorporated under the laws of England and Wales.
In order to secure a quick win in the litigation HMRC will commonly do the following –
1. Allege fraud
2. Raise an Assessment against the Company undertaking the trade, thereby creating a debt to HMRC
3. Apply to the Court on very short notice for a Provisional Liquidator to take charge of the Company and its assets
4. Prevent the Directors, Managers or Shareholders of the Company from challenging the Assessment
Game over you would think?
This tactic has been used against the guilty and innocent trader alike in the UK for the last 20 years. It has lead to questions in Parliament and the removal of several high profile liquidators. Yet it persists as a way of doing business for HMRC.
In the latest victory against HMRC taxpayers who earned their living as alcohol traders succeeded in setting aside a Provisional Liquidation and challenging the Assessments in the correct venue, the First Tier Tax Tribunal.
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