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On the eve of what is sure to be Alistair Darling's most important political statement there is speculation and counter speculation about how he will address the situation of the UK economy next...
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Friday 1st June 2007
Changes to the UK's tax system have come into force in an effort to clamp down on VAT fraudsters.
From today onwards retailers selling mobile phones and computer chips will pay the associated VAT directly to HM Revenue and Customs, as opposed to the supplier as usually occurs.
The new "reverse charge" scheme, is designed to help prevent missing trader intra-community fraud (MTIC), otherwise known as carousel fraud.
Carousel fraud involves criminals gaining VAT registration to acquire easily transportable-goods such as computer chips and mobile phones.
The rogue traders then sell them on at prices including VAT in other European countries, but they disappear before passing on the consumer-paid VAT to the relevant tax authorities.
HMRC says that carousel fraud costs the UK as much as £3 billion every year.
Mike Eland, HMRC director of general enforcement and compliance, claims the new system will no longer allow fraudsters to steal VAT when trading in certain types of goods.
"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," he said.
"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."
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