St Pauls Chambers have a number of members who have defended and prosecuted in VAT carousel fraud cases. These are often extremely complex and document-heavy cases. St Pauls Chambers offer a complete service and are able to advise clients and provide expertise at all stages of carousel VAT fraud cases.

Carousel fraud, also known as Missing Trade Intra-Community (MTIC fraud) or missing trader fraud, is an example of VAT fraud. It involves cases where VAT rules have been ignored, averted or abused during transactions of imported goods between different EU member states.

How does carousel VAT fraud work?

Carousel VAT fraud is a complicated and highly sophisticated process that is very difficult to detect. Here, we explain the missing trader fraud process in five steps:

  1. Carousel fraud involves a chain of events, starting with the purchasing of goods from the missing trader, who has purchased these goods from a supplier in another EU Member State.
  2. The missing trader then sells the goods to another national business, charging VAT. It should then be the role of the missing trader to pay the VAT to HMRC, but fraudsters disappear without doing so.
  3. The business that has bought the goods then sells them on to another business, charging VAT but then also paying the VAT received from the business before, onto the HMRC.
  4. This process can continue, but eventually, a broker sells the goods to an EU customer. As this transaction from broker to customer is within the EU, the customer is not charged VAT.
  5. As the broker paid VAT in purchasing the goods, the broker then reclaims the VAT from the HMRC. This amount is the VAT not paid by missing traders, which solidifies the losses experienced by HMRC.

As you can see, carousel VAT fraud can continuously cycle, which is why it’s described as a carousel.

Who carries out missing trader fraud scams?

Missing trader fraud scams are often conducted by organised crime groups who link illegitimate companies or individuals across borders to facilitate their activity. They often disguise such connections and use fake names and contact details. As a result, this makes it more challenging for HMRC to track them down.

Which industries are typically targeted by MTIC fraud?

Both tangible and intangible goods are targeted in missing trader fraud scams. Sectors that are frequently targeted include telecoms, mobile phones and other high-value electronic goods, precious metals and gas.

What is the impact of missing trader fraud?

Often, cases of carousel fraud involve innocent businesses and, in the past, this has caused for these businesses to lose out. This is because HMRC would hold back VAT repayments to these innocent businesses as the VAT was not given in the first place by the missing trader. However, carousel vat fraud now costs the HMRC a great deal in lost tax avoided by fraudsters. According to a European Parliament report, it is estimated that, in 2015, the UK government lost between £0.5 billion to £1 billion from such scams.

Not only is MTIC fraud damaging to innocent businesses and HMRC, but it’s also damaging to the general public. With heavy VAT losses, the Government loses money that could have potentially been spent on the provision or improvement of public infrastructure and services, such as schools, public transport and hospitals. This is why it’s vital for legitimate businesses and HMRC to be extra vigilant.

Highly organised criminal groups typically conduct VAT carousel fraud, and it is common for these criminals to use the fraudulent money they have illegitimately collected for the funding of other criminal activities, such as drug trafficking or terrorism.

What happens in a carousel VAT fraud investigation?

If you are under investigation for carousel VAT fraud, you will receive a letter from HMRC or a tax audit notice. Upon receiving a letter from HMRC, you should seek out a specialist carousel fraud barrister to provide you with expert legal advice and guidance. The consequences of a carousel VAT fraud conviction are serious, but with the guidance of an experienced carousel fraud barrister, you have the best chance of achieving a positive result.

 

If you are in need of a specialist fraud barrister in your carousel VAT fraud case, please get in touch with our clerks today. Alternatively, learn more about reporting suspected VAT fraud on our blog.

“The clerking team is responsive, extremely approachable and knowledgeable”

The Legal 500

Get in touch

For further information and enquiries please contact our clerks team.

Carousel Fraud Barristers

Sam Green KC

Sam Green KC

Joint Head of Chambers

Call: 1998 Silk: 2015

Nigel Sangster KC

Nigel Sangster KC

Call: 1976 Silk: 1998

Richard Barraclough KC

Richard Barraclough KC

Call: 1980 Silk: 2003

Simon Myerson KC

Simon Myerson KC

Call: 1986 Silk: 2003

Jane Bewsey KC

Jane Bewsey KC

Call: 1986 Silk: 2010

John Harrison KC

John Harrison KC

Call: 1994 Silk: 2016

Jonathon Sandiford KC St Pauls Chambers

Jonathan Sandiford KC

Call: 1992 Silk: 2020

Cameron Brown KC

Cameron Brown KC

Call: 1998 Silk: 2020

Nicholas Worsley KC

Nicholas Worsley KC

Call: 1998 Silk: 2023

Denise Breen-Lawton

Denise Breen-Lawton

Joint Head of Chambers

Call: 2000

Jeremy Barnett

Jeremy Barnett

Call: 1980

Derek Duffy

Derek Duffy

Call: 1997

Alasdair Campbell

Alasdair Campbell

Call: 1999

James Bourne-Arton

James Bourne-Arton

Call: 2001

Danielle Graham

Danielle Graham

Call: 2003

Hal Watson

Hal Watson

Call: 2003

James Lake

James Lake

Call: 2005

Helen Chapman

Helen Chapman

Call: 2006

Hannah Hinton

Hannah Hinton

Call: 2008

Angus MacDonald

Angus MacDonald

Call: 2009

George Hazel-Owram

George Hazel-Owram

Call: 2012

Kristina Goodwin

Kristina Goodwin

Call: 2013

Contact Us

Chambers is centrally located within walking distance of the train station, secure car parks and the Courts.

Contact Us

St Pauls Chambers
Park Row House
19-20 Park Row
Leeds
LS1 5JF

For out of hours assistance please call the senior clerk on 07854170429.

The switchboard will open from 08:30 until 17:30

Phone: +44 (0)1132 455 866
Email: [email protected]
CJSM: [email protected]

Portfolio Builder

Select the expertise that you would like to download or add to the portfolio

Download    Add to portfolio   
Portfolio
Title Type CV Email

Remove All

Download


Click here to share this shortlist.
(It will expire after 30 days.)