January 28, 2006

Government seeks VAT changes against fraud

by Brian Turner

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The UK government has signalled its intent to overhaul tax rules - in order to help prevent VAT fraud.

A common fraud problem is when goods are imported VAT-free into the UK, and VAT is charged on the sale to UK customers - but then the company disappears, pocketing the VAT for themselves.

The scale of the fraud is believed to be so serious as to skew trade figures for the treasury.

This is especially where different companies all in the scame trade between themselves - known as “Carousel” fraud.

This can have an especially bad impact on original businesses trying to reclaim VAT rebates, only to find it frozen because of HM Customs and Excise being unable to account for it.

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Story link: Government seeks VAT changes against fraud

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