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Don’t cheat

15th Dec 2018
VAT Consultant vatadvice.org
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There was an unusually strong criticism of a taxpayer’s business model and (un)ethical standards in this FTT decision. The company, All Answers Ltd, provided essays for students, written by others. The fact that the assessment was of £900,000 indicates the extent of cheating.

Read these quotations, which get to the heart of what the taxpayer provided:

Thus it is readily understood that the appellant’s business model, despite the provisions set out in its Terms and Conditions which are designed to deflect attention from inevitable conclusion, is that it assists those who have little or no academic ability and/or are lazy, to cheat. It is beyond doubt that the appellant’s business thrives upon providing essays, dissertations and coursework to cheats.

In that way the dishonest students, the appellant and the collaborative academics/writers contrive and conspire to debase academic achievement by those who act honestly and honourably when they put in their own work after appropriate study and application.

The FTT went on to hold that the contracts were artificial, but not illegal. It sought to create an agency arrangement when in reality the taxpayer acted as principal:

In our judgement, the introduction of the notion of agency is wholly artificial and was/is intended to disguise the reality that the appellant engages a sub-contractor to produce each product which it has contracted to supply. We acknowledge that each set of Terms and Conditions is deliberately written so as to dictate a different outcome. Those Terms and Conditions are not, in the strict sense, shams, but if we are convinced, as we are convinced, that they have been deliberately honed by the appellant in a bid to achieve an outcome which is wholly artificial, we need not be beguiled by the content thereof.

In passing, the Tribunal also made a critical comment about the taxpayer’s claimed quality control!

You can (and should) read the whole sorry sage here:

http://www.bailii.org/uk/cases/UKFTT/TC/2018/TC06845.html

and Happy Christmas!

 

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By Justin Bryant
17th Jul 2019 15:38

This seems more interesting for its similarity to other quasi sham contract cases and analysing what happens in the real word compared to the contract terms e.g. IR35. See a recent similar case in tax avoidance context at para 55(iii) here:

https://www.bailii.org/uk/cases/UKUT/TCC/2018/396.pdf

Another recent example of this label vs. reality contract analysis is at para 34 et seq here:

https://www.judiciary.uk/wp-content/uploads/2018/12/uber-bv-ors-v-aslam-...

A dissenting view re tax legislation is at para 231 here:

https://www.bailii.org/uk/cases/UKFTT/TC/2017/TC06111.pdf

But see para 39 et seq here re another VAT case:

https://assets.publishing.service.gov.uk/media/5c498b40ed915d388d7c543e/...

And see para 45 here re another VAT case:

https://www.bailii.org/eu/cases/EUECJ/2013/C65311.html

And see para 50 here re another VAT case:

http://financeandtax.decisions.tribunals.gov.uk/judgmentfiles/j11219/TC0...

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