Y4 Express Limited v The Commissioners for HM Revenue and Customs [2022] UKUT 00040 (TCC)
| Jurisdiction | UK Non-devolved |
| Judge | Judge Jonathan Richards,Judge Andrew Scott |
| Neutral Citation | [2022] UKUT 00040 (TCC) |
| Subject Matter | 17 February 2022 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Published date | 17 February 2022 |
[2022 ] UKUT 00040 (TCC)
Appeal number: UT/2021/000038
VAT –whether taxpayer receiving taxable supplies and entitled to credit for input tax
– no – appeal dismissed
UPPER TRIBUNAL
(TAX AND CHANCERY CHAMBER)
Y4 EXPRESS LIMITED
Appellant
-and-
THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE & CUSTOMS
Respondents
Sitting in public at the Royal Courts of Justice, Strand, London on 20 January 2022
Tim Brown, Counsel, instructed by SKS (GB) Limited for the Appellant
Joseph Millington, Counsel, instructed by the General Counsel and Solicitor for Her
Majesty’s Revenue & Customs for the Respondents
© CROWN COPYRIGHT 2022
TRIBUNAL:
JUDGE JONATHAN RICHARDS
JUDGE ANDREW SCOTT
2
DECISION
1. Until 2013, the app ellant company (“Y4”) was able to obtain preferential rates on
postage from the Royal Mail (“RM”). When RM refused to allow Y4 to continue to use
that service, Y4 sought to circumvent the problem by using RM accounts set up in the
names of Mr Pat Ning Man (“Mr Man”) and Colemead Limited (“Colemead”). The
issue raised in these proceedings is the extent to which Y4 is entitled to credit for input
VAT in connection with payments that it made to Mr Man and Colemead.
2. In a decision released on 10 July 2020 (the “Decision”), the First-tier Tribunal (the
“FTT”) held that Y4 was not entitled to input tax credit. The FTT also held that Y4 was
not entitled to credit for input tax in respect of goods and services supplied to it by the
courier company Yodel and that Y4 was liable to a penalty in respect of inaccuracies in
its VAT returns. With the permission of the FTT, Y4 appeals against some, but not all,
of the FTT’s determ inations.
The decision of the FTT
3. In this section, references to numbers in square brackets are to paragraphs of the
Decision unless we say otherwise.
Findings relating to Y4’s business
4. Y4 was incorporated on 27 May 2010. Its business at material times incl uded
arranging for the importation of goods from companies based in China and Hong Kong.
That business involved it collecting the goods from the airport, storing them if required
and arranging delivery to the final customer ([7]).
5. The FTT made no express finding that Y4 was registered for VAT at material times
but it was common ground that Y4 was so registered.
6. Y4’s business required it to use the services of delivery companies including RM.
Until 2013, Y4 used RM’s Printed Postage Impression s (“PPI”) service. The PPI
scheme provided Y4 with access to preferential rates and required it to make daily
declarations by means of an online business accou nt (“OBA”) of the items it was
sending. In June 2013, RM became concerned that Y4’s declarations were not accurate
and eventually susp ended Y4’s access to th e PPI scheme. Y4 agreed to pay RM
£600,000 ([13]). The FTT did not explain precisely what that payment was for, but it
can be inferred that it was to compromise some claim that RM had against Y4 for
alleged under-declarations of postage due to RM.
7. Mr Samuel Yeung was, at material times, the company secretary of Y4. He had a
personal f riendship with both Mr Man ([14]) and Mr Fung, the sole director and
shareholder of Colemead ([93]). Mr Samuel Yeung devised a plan to use his friendship
with both men to get around the problems Y4 was having with RM.
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