VAT Fraud On Carbon Credits

Carbon credits are licences to emit carbon dioxide or "permits to pollute"- and are seen as a vital weapon in the battle against climate change.

They are issued to companies that emit CO2 such as power stations, electricity companies and so on. They can be traded privately, through a broker or through exchanges, the European Climate Exchange, (ECX) being the largest.

In 2008 the market was worth almost £80 billion. However, there are growing concerns that the UK has become a major target for VAT fraudsters, which has led to a swift response from the Government to ensure that the integrity of the EU Emissions Trading Scheme is not undermined by VAT fraudsters.

VAT MTIC (Missing Trader Intra Community) fraud occurs when VAT standard rated goods are traded free of VAT throughout the European union. This is because although VAT is due in the country in which the customer belongs VAT can be accounted for and simultaneously reclaimed by the customer. The fraud takes