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VAT-busters target business on the Web

Illegal traders warned they cannot hide in Cyberspace

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UK companies trading on the Web but failing to declare VAT are being targeted by Customs and Excise officers using the Internet to track them down. The initiative has proved so successful in East Anglia -- where it's been up and running for the last year -- that it's likely to adopted nation-wide by all 14 regional Customs divisions by the autumn. Six companies in the Anglia Region -- which includes Essex and Norfolk -- have already been caught out and are currently being investigated by officials for alleged fraud and failure to pay VAT. More still have been passed on to other Customs divisions throughout the country as officials in East Anglia have unearthed Web-based companies on the make. "The good news is that the companies we've found are now registered for VAT and paying tax," said Caroline Benbrook, district manager of the Anglia Region. "Most of them were ghost traders, and the Internet was the only place we would have found them. If we didn't look there, they'd still be trading illegally now," she said. A hotel and a company selling car parts were among the businesses unearthed by officials. Common dodges include companies trading online that are not registered for VAT, but still charging customers VAT and pocketing the difference. Or companies which are not charging VAT in order to undercut a competitor. Customs officials will decide within the next six months whether the scheme should be rolled-out throughout the country but Benbrook is in no doubt that it should. "If we want to stop fraud and tax evasion, we have to keep up with the forefront of technology," she said. ®

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