Background
Parousia represented a corporate client in relation to extensive HMRC VAT enquiries which had continued over a number of years.
A significant element of HMRC's case involved serious allegations concerning the application of the Kittel principle, under which HMRC may seek to deny a business the right to recover input VAT where it alleges that the business knew, or should have known, that its transactions were connected with VAT fraud.
The potential financial and reputational consequences for the client were substantial.
Our approach
Parousia undertook a detailed review of the historic transactions, the supporting documentation, and the technical basis of HMRC's position.
Parousia robustly challenged HMRC's arguments and managed the ongoing correspondence and negotiations, with a view to achieving a commercial and technically appropriate resolution rather than a protracted dispute.
Outcome
Following detailed representations, the long-running enquiries were successfully brought to a conclusion, substantially reducing the client's potential VAT exposure and achieving significant VAT savings.
The outcome provided the client with both financial certainty and closure following a prolonged period of HMRC scrutiny.