You might also be interested in
Replies (3)
Please login or register to join the discussion.
MTIC Fraud
Dave Brown has recommended a solution which would work if implemented. The problem with this is that the fraudsters would immediately start to trade in a different product such as Mont Blanc pens, designer clothing and jewellery - all of which have been used to commit MTIC fraud. Unfortunately HMRC can't introduce a scheme for every product.A "tax free ring" for non-retail sales such as existed in Purchase Tax days would not stamp out fraud but would limit the extent to those at the beginning and end of a chain. However this is probably a non starter as it breaches the 6th VAT Directive.
A failure of imagination...?
It seems to me that the Big Four are lacking in imagination, as are the Treasury and HMRC. Surely the answer is to set up with Customs an additional account for each trader in goods like these. Then let the buyer pay the VAT element straight to Customs on each purchase, which is credited to the seller's account. The seller then accounts for output tax by Customs taking the output tax from the account and repaying any input tax to the seller.
If the traders were all forced to do it that way, Customs would not lose any tax because Step 1 of the procedure would put it in their hands. It would stop the fraud in its tracks. OK, it would need amendments to HMRC's computers, but that's not an impossible notion, is it?
I wonder if HMRC pay for these ideas. My fee is 1% of 1% of the tax saved. I would be well satisfied with that.
Remember - you read it here first.
HM R & C moves on MTIC fraud
It has recently been reported that H M R & C have been 'leaning' on banks to close accounts of mobile phone companies.
See press report UK Customs denies pressing banks to pull out of mobile sector.
Certainly Customs would be happy to disrupt the activities of suspected fraudsters and these moves could be seen as a way for Customs to have maximum effect in return for minimum effort on their part.
Of course where accountants have suspicions of VAT fraud they are obliged to report them, internally to the firm's MLRO who will report externally to NCIS, under section 330 Proceeds of Crime Act 2002.
If you are an MLRO you can get confidential one-to-one email support, information and NewsAlerts from my website www.mlrosupport.co.uk.
David
[email protected]