Towards the end of last week HMRC announced they’d made another 10 arrests of suspected VAT fraudsters; this after successfully getting six convictions earlier in the month. HMRC investigations are becoming more complex and subsequently more effective.
During Operation Varlet 20 premises throughout the UK were targeted during coordinated dawn raids leading to the arrests of 10 as yet unnamed individuals suspected of VAT fraud.
HMRC are seemingly becoming more effective in investigating and securing convictions for MTIC (missing trader intra-community) fraud;
Last weeks arrests were the results of some 18 months of investigation of a large group of individuals, companies and associated bank accounts suspected of the ‘carousel’ fraud.
Last month it was reported that after a 5 year investigation of almost 100 traders HMRC secured the convictions of six men – Colin Jones (Cheshire), Paul Sweeny (Amsterdam), Brett Issitt (Lancashire), Raymond Cox (Staffordshire), Peter Glover (Warwickshire) and Michael McNeill who received an average of 8 years each for a total of £85m in fraud – representing over £1.7m for each year in prison for each of them.
To stem this seeming tide of carousel fraudsters the clever chaps at HMRC have recently introduced reverse charging for VAT payments for mobile phone and computer chip traders, thus removing the mechanism that allows fraudsters to claim back VAT.
Euan Stewart, Director of Operations, Criminal Investigation for HMRC said:
"Missing trader fraud is a sustained attack on HMRC, and tackling it is HMRC's top priority. Today's arrests follow months of painstaking investigative work by dedicated officers. The level of sophistication of these frauds means that our investigations are becoming more complex, but we are committed to working with the Revenue and Customs Prosecutions Office to bring the criminals behind the frauds to justice and to recovering the money stolen from the British Taxpayer. This crime is not victimless; it is organised and causes real harm."
However, Mobile Business has received ongoing reports that even with reverse charging in place HRMC are taking no chances; it’s pretty difficult to reclaim VAT if you do not have a VAT number, many traders are still waiting for theirs after 4 months and counting.
No number, no VAT, no fraud – and, no business, no income, no industry.