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03/09/2003
Customs investigate suspected £80m VAT scam
Customs and Excise investigators have arrested two people in Chelmsford and searched business premises across England in connection with a suspected £80 million VAT money laundering scam.
A spokesperson for Customs and Excise said that it is believed that money was channelled through the bank accounts of two Chelmsford-based companies. It is thought that the money may be the proceeds of what is known as a VAT 'missing trader' fraud involving the sale of mobile phones and computer chips.
Over 20 officers were involved in searches of business premises and homes in Essex, Sheffield, Nottingham and Leeds.
As part of the investigation a 33-year-old man and a 32-year-old woman arrested and questioning by Customs investigators in Braintree about alleged money laundering offences. Both were later released on bail, without charge, pending further investigations.
Tackling missing trader fraud is a top priority for Customs. Since September 2000, there has been a nationally co-ordinated strategy to tackle this type of offence.
The scam involves importing goods into the UK from the EU that are correctly zero-rated for VAT. These goods are then sold on through a series of companies in the UK, all liable to VAT at the standard rate, before being exported back to the EU. The company importing the goods incurs a VAT debt. Although it has to account for VAT charged on the sales, it has no VAT repayment claim. In a fraud of this type, this initial 'link' in the chain goes 'missing' and never accounts for the VAT due.
Last year, it was estimated that VAT missing trader fraud or 'carousel' fraud costs the exchequer around £2.5 billion a year.
(SP)
A spokesperson for Customs and Excise said that it is believed that money was channelled through the bank accounts of two Chelmsford-based companies. It is thought that the money may be the proceeds of what is known as a VAT 'missing trader' fraud involving the sale of mobile phones and computer chips.
Over 20 officers were involved in searches of business premises and homes in Essex, Sheffield, Nottingham and Leeds.
As part of the investigation a 33-year-old man and a 32-year-old woman arrested and questioning by Customs investigators in Braintree about alleged money laundering offences. Both were later released on bail, without charge, pending further investigations.
Tackling missing trader fraud is a top priority for Customs. Since September 2000, there has been a nationally co-ordinated strategy to tackle this type of offence.
The scam involves importing goods into the UK from the EU that are correctly zero-rated for VAT. These goods are then sold on through a series of companies in the UK, all liable to VAT at the standard rate, before being exported back to the EU. The company importing the goods incurs a VAT debt. Although it has to account for VAT charged on the sales, it has no VAT repayment claim. In a fraud of this type, this initial 'link' in the chain goes 'missing' and never accounts for the VAT due.
Last year, it was estimated that VAT missing trader fraud or 'carousel' fraud costs the exchequer around £2.5 billion a year.
(SP)
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