Neil Warren examines the issues around MTIC VAT fraud and the importance of the need for a trader to consider the circumstances surrounding transactions
MTIC (Missing Trader Intra-Community) VAT fraud basically works by the creation of a supply chain where at some stage a key player in the chain disappears.
The chain normally involves goods being purchased from a supplier in another EU country who does not charge VAT to his UK customer because he is given the customer’s UK VAT number. The goods are then traded between different UK companies before one trader disappears with a large output tax liability owing to HMRC.
Dishonest companies can effectively sell goods at a loss and still make a reasonable profit at the expense of HMRC. The customers of the dishonest trader are often satisfied because they have bought goods very cheaply (below...
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Neil Warren examines the issues around MTIC VAT fraud and the importance of the need for a trader to consider the circumstances surrounding transactions
MTIC (Missing Trader Intra-Community) VAT fraud basically works by the creation of a supply chain where at some stage a key player in the chain disappears.
The chain normally involves goods being purchased from a supplier in another EU country who does not charge VAT to his UK customer because he is given the customer’s UK VAT number. The goods are then traded between different UK companies before one trader disappears with a large output tax liability owing to HMRC.
Dishonest companies can effectively sell goods at a loss and still make a reasonable profit at the expense of HMRC. The customers of the dishonest trader are often satisfied because they have bought goods very cheaply (below...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
