Being Civil To MTIC Fraudsters

This article was first published in the Tax Journal, Issue 973, 23 March 2009

Neil Swift, an associate in the Fraud and Regulatory department of Peters & Peters, looks at attempts by HMRC to combat missing-trader fraud by non-criminal means

MTIC fraud has had such a devastating effect on the VAT free movement of goods between one EU state and another that it is hardly surprising that it has prompted Government to produce one quick fix response after another. The interaction of missing traders, buffers and brokers has led to the loss of thousands per transaction and millions or even billions of pounds per year.

The fundamental challenge for law enforcement has been that whilst financial rewards for the fraudsters have been high, the risk of being punished has been low. A sad fact recognised by the Public Accounts Committee. However, whilst the scale of the fraud appears to have peaked in 2005/6 with £4-6billion of attempted fraud, government efforts to combat