VATF53430 - The Kittel principle intervention: Kittel in more detail: What is meant by ‘knew or should have known’: General awareness

The taxable person’s awareness of fraud in general and specific to the market in which he trades (VATF32100 and VATF32300) at the time the transactions took place should be evidenced and documented. This would include the following:

• general press coverage of VAT fraud, trade coverage and public discussion;
• details of warnings given, whether in writing or by means of conversations by telephone or on visits, which informed the trader of the risks of fraud and/or its characteristics;
• any record of acknowledgements by the trader, whether in writing or in discussions, of a knowledge or understanding of those risks and characteristics;
• membership of a trade body that has highlighted MTIC / VAT fraud or has been involved in supporting litigation or lobbying against HMRC anti-fraud measures;
• frequency and extent of the notifications from HMRC in previous periods of the taxable person’s involvement in transaction chains traced to fraudulent evasion of VAT, in particular, what proportion of all the trader’s transactions did this represent?
• Involvement of key personnel in the running of other businesses with known involvement in transaction chains that have been traced back to fraudulent evasion of VAT and which have received HMRC notifications concerning VAT fraud.

The above list is not exhaustive.