HMRC beats new form of VAT fraud

A new form of carousel fraud has been successfully countered by HM Revenue
& Customs.

Three companies, Just Fabulous, Evolution Expert Trading and Brayfal fought
HMRC in the High Court, arguing they were able to reclaim VAT.

They said they could not have known they were operating in a new type of
carousel fraud known as contra trading.

Under contra trading , carousels are linked across borders to offset losses
in one country against another, making it more difficult to track where tax has
been unpaid.

won the case, the courts deciding that although a new type of carousel
fraud, still fell under the Kittel ruling, reported
. Under Kittel, companies are denied VAT reclaims
where they should have known that VAT fraud was taking place at some point in
the chain.

Further reading:

Interest boost to VAT reclaims

Are you a spivvy

Minister hails ‘massive’ carousel fraud

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