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Entatech owner Jason Tsai has commented on the long-running court case between his former business Changtel Solutions and HM Revenue & Customs (HMRC).
Tsai sold Changtel last year to a private investor, adding that the business was dormant and separate from Enta Group, and promising that whatever happened, it wouldn’t "affect the operation of Entatech".
HMRC argued that Changtel had over-declared input VAT back in 2012, and while HMRC had initially won a case at the Court of Appeal, earlier this year Tsai outlined plans to take the case to the Supreme Court.
However, his appeal to the Supreme Court was dismissed in late May.
Tsai dismissed recent reports published elsewhere which claimed that Changtel owes £15.5 million in VAT assessments.
"The title mentioning £15.5 million export VAT never happened – it’s totally wrong," Tsai told PCR. "In fact, the amount is limited to £2.5 million of exports, which the appeal Court judge found that the export documents were not satisfactory as proof.
"As for the rest of the £13 million, the independent accounting firm BDO has done a forensic report and proved that HMRC was wrongfully accusing the company in over-claiming the VAT. Also, Changtel has always paid VAT to suppliers and then claimed input VAT accordingly.
"In fact, Deputy Judge David Donaldson QC dismissed the winding up petition on March 21st 2014 but stayed this dismissal until after judgment on any appeal to the court of appeal from his order.
Tsai added: "Hence, HMRC appealed against Deputy Judge Donaldson’s decision on December 16th 2014. Unfortunately the appeal court didn’t look at the BDO forensic report and other merits of the dispute, but granted HMRC appeal to wind up Changtel on January 28th this year.
"Changtel kept fighting and appealed to the Supreme Court on February 24th 2015 but it was too late. It was dismissed on May 25th 2015 and the company is to be liquidated."
