TaxCorporate TaxMPs pressure HMRC to nail carousel fraud advisers

MPs pressure HMRC to nail carousel fraud advisers

The Public Accounts Committee has demanded that HMRC does more to sniff out advisers helping crooks to set up carousel fraud structures

In a meeting of the PAC, Mike Eland, the director general of enforcement and
compliance at HMRC and Euan Stewart,
deputy director of criminal investigations, were grilled by members who insisted
HMRC needed to increase efforts to target accountants who helped fraudsters
establish companies and obtain VAT registrations.

MP Ian Davidson said it would be impossible for carousel fraudsters to
operate without the help of professionals. ‘I am presuming that if we went
downstairs and got a couple of ladies working in the cafeteria, they would not
be able [themselves] to start a mobile phone carousel fraud. They would require
help from accountants and lawyers and so on,’ Davidson said.

‘Lots of these frauds could not operate without the expertise of accountants
and lawyers who seem to be just sailing away with it scot- free and are not
applying due diligence,’ he said.

Stewart said HMRC had arrested 11
professionals over the past two years and obtained six convictions relating to
carousel fraud. Three other professionals had been convicted for straightforward
VAT theft.

The alleged involvement of the profession in the scams has caused rows in
recent years, as HMRC attempted to co-opt the profession in its fight, implying
that some tax advisers regarded the frauds as just another complex avoidance
scheme.

Paddy Behan, a VAT partner at
Grant Thornton,
however, said that HMRC was not holding back from pursuing advisers when
necessary.

‘HMRC most certainly does not lack the resolve to pursue advisers where it is
reasonable to do so,’ Behan said.

An HMRC spokeswoman said a determined effort had been made to improve
relations with professionals.

‘We aim to persuade professionals not to represent those involved in the
fraud and will consider reporting any who do to their professional bodies, and
where appropriate will seek to prosecute,’ the spokeswoman said.

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