Dealers win High Court VAT action against Customs

Next round, Europe

  • alert
  • submit to reddit

The FTI (Federation of Technological Industries) has won the right to take its legal battle with Customs and Excise to the European Court. The trade body was set up in response to the Finance Act which made brokers responsible for VAT payments through the entire supply chain.

Customs' intent was to destroy widespread and massive scams, known as missing trader VAT fraud, over the export of computer chips and mobile phones. But the effect has been to paralyse CPU and mobile phone broking. Also, Customs is accused of failing to return VAT repayments owing to legitimate traders on legitimate deals because the goods had at some stage passed through dodgy dealers, with which they had no connection.

The High Court ruled that FTI has the right for its case to be heard by the European Court of Justice. The court also warned Customs and Excise to behave with "the greatest caution" in applying the law while the court case is ongoing. The case is likely to take at least a year to settle.

Customs and Excise said in a statement: "Customs welcome that most aspects of this case have been found in our favour. We have had huge successes in cracking down on missing trader fraud in the mobile 'phones and computer chips sectors this year and many legitimate traders have commented favourably on the extent to which the trade has been cleaned up."

FTI solicitor Alias Dass of Dass Solicitors said: "If the new law were able to stand, it would be akin to taking a taxi ride after the previous passenger had done a runner and at the end of the journey being charged your fare plus the fare of the last passenger with the driver saying it must be the right thing to do because I have now got the right money."

Mark Cook, chairperson of FTI, is standing down and will be replaced by David Downie of Ivylink Ltd. The FTI is seeking more members to join the organisation, this is partly to strengthen its voice, and partly to improve funding and help pay the lawyers. More than 60 companies so far have given £100,000 to the fighting fund. ®

Related stories

Two arrested in £80m money laundering probe
VAT's up? - help at last
Customs wins £13m VAT carousel case


SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.