MTIC VAT Fraud Investigation: Tax Expert Witness UK

MTIC VAT fraud investigations involve HMRC tracing transaction chains to identify businesses connected to missing trader fraud and denying input tax where the knowledge test is met. The investigation procedure involves extensive document requests, transaction tracing, and assessment of the taxpayer's due diligence procedures.

Tax expert witnesses analyse the due diligence conducted by the taxpayer, assess red flags in the transaction chain, and determine whether the knowledge test under Mobilx v HMRC [2010] is satisfied. Expert evidence on the knowledge test has achieved significant successes, including cancellation of VAT assessments exceeding £1.3 million.

Early expert instruction during the investigation phase, before assessments are finalised, can inform representations that prevent assessments being raised or reduce their scope. Where assessments have been raised, expert evidence is essential for FTT appeal proceedings.