Feeds

Missing traders leave hole in VAT receipts

First annual drop in 33 years

The Power of One Infographic

Spiralling missing trader fraud has led to the first year on year drop in VAT receipts since the tax was launched over 30 years ago, latest government figures show.

The fiddle, typically carried out around shipments of small high value items such as computer chips and mobile phones, could amount to £2bn a year, HM Customs and Revenue believes. But the Office of National Statistics (ONS), which produced yesterday’s figures, believes the missing sum could be much higher, The Guardian reports.

Full year VAT revenues in the 2004 fiscal year were £73bn, but slipped slightly to £72.9bn in the just finished year. In the first calendar quarter, receipts were £18.3bn. compared to £18.5bn the previous year.

The ONS has already warned that VAT fraud could be distorting its overall figures for the UK’s trade deficit.

The problem for the UK authorities is that some of its tactics to date have been condemned as heavy handed, hurting legitimate traders unfairly by freezing VAT refunds, while the fraudsters have long since cleared off with their ill-gotten gains. A number of cases brought by the revenue have collapsed, and cases that have reached the European courts have gone against the UK authorities.

In January, HMRC asked the European Commission to let it move to a “reverse charge” procedure for VAT on certain items, such as mobile phones, computer chips, and other high-value electronic items, to reduce the opportunity for fraudulent VAT claims.

Faced with dwindling VAT revenues, authorities can be expected to step up their efforts to crack down on fraud. At the same time, there are fears that figures showing the losses to government coffers are spurring copycat scams, as unscrupulous business types see the kind of profits they could make by ducking the VAT regime. ®

Mobile application security vulnerability report

More from The Register

next story
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Bose says today is F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.