HM REVENUE AND
CUSTOMS News Release (NAT 36/07) issued by The Government News
Network on 1 June 2007
A new way of
accounting for VAT takes effect today (Friday 1 June) which
changes the way VAT is paid on mobile telephones and computer
chips, in a measure designed to combat fraud in these goods.
From today, VAT-registered customers of these goods will be
required to pay the VAT on the sale to HMRC, as opposed to the
supplier - which is the norm in most transactions. The move is
designed to help combat what is known as MTIC (Missing Trader
Intra-Community) fraud - also known as carousel fraud.
This accounting scheme is known as the "reverse
charge", and it removes the mechanism by which fraudsters
steal VAT when trading in certain types of goods. The process is
targeted at mobile telephones and computer chips, as these are the
goods most commonly used in MTIC fraud.
Mike Eland, HMRC Director General Enforcement & Compliance said:-
"MTIC fraud is a serious criminal attack on the tax system
which diverts vital resources away from the UK's public
services into the pockets of organised criminals and we are
absolutely committed to stopping it. Already our strategy has
significantly reduced the level of attack, and we continue to
track down and prosecute those behind the fraud as well as
targeting others who choose to profit from it".
"The fraud is becoming increasingly sophisticated and
complex. HMRC have further strengthened their strategy for
tackling MTIC over the past few months, and the reverse charge
will be an important tool in combating it."
Issued by HM Revenue & Customs Press Office
Website http://www.hmrc.gov.uk