Major VAT Fraud Operation |
| HMRC criminal investigators have arrested 13 people following dawn raids across Europe in an operation targeting multi-million pound VAT fraud. The international operation saw over 300 HMRC criminal investigators deployed across four countries; France, Spain, Germany and the UK. Five people were arrested in the London area, two in Glasgow, three in the Midlands and three in Cheshire.
The arrests are linked to suspected 'Missing Trader' fraud, which we have previously reported on in enews. ‘Missing Trader’ fraud is a sophisticated and organised criminal attack on the VAT system. The fraud arises through contrived transaction chains involving supplies of high value goods with the tax loss occurring when the VAT charged by the supplier is not paid to HMRC but can be reclaimed by the recipient. A reverse charge procedure was introduced in Finance Act 2006 whereby the VAT registered customer, rather than the seller, will have to account for and pay the VAT on the supply of certain goods of a kind used in ‘Missing Trader’ fraud, such as mobile phones and computer chips. Although the legislation was introduced in Finance Act 2006 with a planned implementation date of the reverse charge of 1 December 2006 this has been postponed. The delay is due to difficulties in the negotiations with other member states on the change in law in other countries to introduce the charge. The government has confirmed that the discussions are still continuing and still plans to introduce reverse charge VAT accounting for a range of goods, including mobile phones and computer chips, once agreement has been reached. Euan Stewart, HMRC Deputy Director of Criminal Investigations, said: ‘Organised criminals are attacking the tax system, with the aim of stealing huge amounts of revenue. The scale of the problem across Europe is unprecedented, and HMRC has significantly strengthened its response to this serious fraud. Today's operation, one of the biggest ever undertaken by HMRC, is part of a large scale, international criminal investigation into frauds that may run to hundreds of millions of pounds. We are committed to tackling VAT fraud and to showing the criminals behind it that there are no safe havens. We will pursue them, and the money they steal, wherever they operate in the world.’
Internet link: Press release |
