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The volume of VAT "carousel" fraud was much lower than thought during in the
first half of the year, official data has confirmed.
There was a dramatic fall in
July trading levels suggesting HMRC may be getting to grips with the problem.
The fraud has existed for some ten years but has exploded over the past year as
criminals have developed "virtual" frauds, which do not need real goods moved.
HMRC estimates losses for the 2004-05 financial year at between £1.1 billion and
£1.9 billion on activity of £3 billion.
With activity likely to be at least 10 times higher this year, VAT losses could
reach more than £10 billion, though official estimates will not be available
until later this year.
The number of HMRC staff investigating VAT fraud doubled this year to 1,000,
with officials believing they may be regaining the upper hand.
Revenue & Customs issued monthly fraud estimates yesterday showing a fall in
activity to £1.6 billion in July, down from more than £4 billion in each of the
previous four months.
Source:
Credit
Control Journal
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