Diversion Fraud

This occurs where dutiable goods such as cigarettes and alcohol are diverted to jurisdictions where the duty is less than in the UK.

There are many variations of this type of fraud.

Missing Trader Fraud (MTIC)

HMRC Investigators and HMRC prosecutors invest much time into detecting this type of fraud. The fraud involves a chain of companies dealing with large quantities of small high value goods such as mobile phones or microchips.

The company at the start of the chain will sell on the goods they have imported, VAT free to the UK company will charge VAT accordingly. VAT liability continues to pass down the chain but the company at the start of the chain had the largest VAT liability having charged VAT on the sale but not being charged VAT by their supplier from the overseas.

The value of such claims can be easily over £1 million. The ultimate liability for VAT is in the hands of a * which leaves HMRC out of pocket for the ultimate payment of VAT.

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Fraud & Tax Offences / Diversion Fraud

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