MTIC (Carousel) Fraud

 

Missing trader intra-community (MTIC) fraud, also known as carousel fraud, is a sophisticated criminal attack on the UK VAT system, which in 2004/05 is estimated to have cost between £1.12 and £1.9bn.

The fraud is largely perpetrated using goods such as mobile phones and computer chips, but also includes other electronic goods.  It involves goods imported VAT-free from other EU Member States being sold through contrived business-to-business transaction chains in the UK, and subsequently exported.

 

The tax loss occurs when the VAT charged on the initial sale of the goods in the UK is not paid to HMRC because the seller disappears.  The purchaser can still reclaim the VAT, so the loss crystallises when the trader who exports the goods from the UK makes a repayment claim.

Click here to access HM Revenue & Customs' report on the subject.

 

Topical news on this subject and other fraud-related articles can be found under Latest News.