HMRC v B&M Retail Ltd Tribunal Decision

The problem of missing traders and evidencing duty payments on goods purchased from secondary wholesalers has posed a significant challenge for businesses trading in the wholesale alcohol industry.

HM Revenue & Customs (‘HMRC’) continue to take the stance that it is reasonable and achievable for any secondary wholesaler to obtain evidence of duty payment on any goods sourced from the secondary wholesale market. Numerous businesses have suffered excise duty assessments based on HMRC asserting this stance and claiming chains of supply are vitiated by missing trader fraud.

This has led to numerous excise duty assessments and penalties being appealed in the Tribunal, however all appeals were held behind the case of HMRC v B&M Retail Ltd (B’&M’).

B&M's appeal to the First-tier Tax Tribunal was allowed, however HMRC appealed this decision to the Upper Tribunal where they won on appeal. This was bad news for all other businesses whose appeals were held behind this decision in the Tribunal and would now have to fight out their cases on its own merits with little chance of success.

The case of Davidson & Robinson has now however challenged the B&M decision in the Upper Tribunal meaning that all other cases will now be held up in the Tribunal awaiting the outcome of this decision.

While this is good news for all businesses involved by providing the opportunity for a more favorable decision, the process could take up to two years to come to a conclusion. There is of course the possibility HMRC could win this decision and if so each businesses case will still need to be fought out on its own merits.

With this potentially large delay in needing to prepare your case, we encourage all businesses with B&M type assessments that are held up in the Tribunal to immediately start protecting their position by gathering the necessary evidence to fight their cases if necessary.

All businesses with appeals in the Tribunal should immediately seek disclosure from HMRC to gain a better understanding of their position and what evidence would be required to fight their case. It is likely that the assessments are based on the assumptions that the supply chains in question contains missing traders.

Minimal investigation can prove these assumptions to be wrong and our sister Company, Vincent Curley & Co Ltd, have routinely evidenced that supposed missing traders were in fact not missing at all. In addition it has been possible to illustrate that assessments applied by HMRC are based on inaccurate and simply incorrect intelligence.

However finding this evidence in two years’ time will prove increasingly difficult and may cost you your appeal in the Tribunal. Any businesses that are accused of being missing traders will be increasingly difficult to contact and it will be increasingly challenging to evidence these businesses were not missing traders at the relevant time period. It is therefore crucial that all businesses with B&M type assessment gather this evidence immediately and avoid losing their appeals in the tribunal due to simply not being able to gather the evidence necessary to prove their case.

Our sister company, Vincent Curley & Co Ltd, are offering to review clients cases for free in order to advise the best approach to protect their position and maximize their chances of winning their cases. You can contact Vincent Curley & Co Ltd for this free review today on 01327 340 298. With the wealth of information and expertise available to The Due Diligence Exchange Ltd we are also able to offer a high level of support in locating and evidencing that accused missing traders are not in fact missing at all. Please contact us today on 0844 561 6852 or by email on enquiries@thedde.com.