Carousel fraud: Conditions for losing the right to recover input tax

In the context of Carousel fraud, a claimant loses the right to recover certain input tax if HMRC prove:

(1)there was a VAT loss;

(2)that loss resulted from a fraudulent evasion (note: the question is whether someone fraudulently evaded VAT, not whether the claimant was fraudulent);

(3)the claimant's relevant transactions were ‘connected’ to such evasion. The requisite connection can be proved even if the claimant did not deal with or know the fraudster, i.e. a connection through a chain of transactions or through some arrangement can be enough; and

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