HM Revenue and Customs (HMRC) is considering an appeal to the High Court after a VAT Tribunal dismissed its fraud claims against UK mobile phone trader Livewire Telecom.

In a case expected to set a precedent for hundreds of other mobile phone and components traders awaiting VAT repayments under the government’s Extended Verification scheme, the tribunal spurned all of HMRC’s claims against Livewire that alleged it was involved in contra trading VAT or MTIC fraud (CRN Online, 24 January).

Northamptonshire-based Livewire had originally invoked a Judicial Review process through the High Courts against HMRC after it withheld a seven-figure VAT repayment (CRN Online, 29 January 2007).
In a statement, HMRC said: “The tribunal found on the facts of this case that the firm’s transactions were not connected to MTIC fraud. HMRC is considering the tribunal’s findings to decide whether or not to appeal the decision to the High Court.”

Anthony Elliot-Square, director of the industry body the Federation of Technological Industries, said: “So many companies have gone to the wall due to Extended Verification and it is disgraceful what HMRC is doing. However, the Livewire case shows the value of using proper professional advice to fight your corner.”

Clive Jefferson, managing director of Procomm, a mobile phone trader, which is owed about £3.5m from HMRC (CRN, 12 March) said: “This is the shot in the arm that the industry needs. We have been waiting for somebody to look at this case with the common sense it needs. It has certainly opened up a whole can of worms for HMRC.”