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Off the back of a lorry?
The Budget included some drastic measures to deal with what is known as 'Missing Trader VAT Fraud'. The idea is that someone registers for VAT, which entitles them to buy goods from other EU states without paying VAT in that country. They then sell the goods in the UK, charging VAT, and disappear before Customs catch up with them. This seems a simple ruse, and it depends on Customs registering businesses and then losing track of them - but it apparently costs the Exchequer millions of pounds a year.
Customs have been trying to tighten up the registration procedure, but the Budget introduced completely new powers. Alarmingly, they reduce Customs' losses on missing traders by moving the pain to people they can find - honest, available, registered businesses. The two main new powers allow Customs to block input tax on the purchase of goods if the purchaser did not have reason to believe that the transaction was above board; and to collect the missing trader's output tax from someone further down the supply chain, such as a customer or the customer of a customer, again if there were reasons to suspect that something was funny about the deal.
Even before the introduction of the new rules, Customs have won a case against a company which bought and sold computer chips in what was held not to be a proper commercial deal. Although Customs did not argue that the company knew there was a fraud behind it, the company could not claim back the VAT charged to it by the missing trader.
Customs try to reassure honest traders by saying that these rules ought not to apply to them. But it seems that the unquestioning will be made to pay for the dishonest. If someone you don't know offers what seems to be an unreasonably good price to buy mobile phones, computer equipment, alcoholic products or fuel (the main objects of the scam), make sure that you look the gift horse very carefully in the mouth.
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These rules are in the Finance Bill 2003 at clauses 17 and 18. The case is Bond House Systems Ltd (VAT Tribunal decision 18,100).
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