TaxAdministrationCarousal VAT fraud cases suspended

Carousal VAT fraud cases suspended

Customs & Excise has frozen up to 70 VAT fraud prosecutions after it was claimed the department withheld vital documents from defendants, claims the Financial Mail.

Link: Magic mushroom sellers tripped up by Customs

The cases relate to VAT frauds involving mobile phones and computer chips, the so-called ‘carousel fraud’ scams. The largest case involved a £162m loss to the British taxpayer, and it is believed that £2bn a year is lost in total to the scams.

The scams exploit a loophole in European Single Market rules where VAT is only paid on transactions inside EU countries, but not on trades between them.

Companies would import goods VAT-free from other EU states and then sell them on in Britain, charging VAT.

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