HM Revenue and Customs (HMRC) has struck again in its battle with the industry over VAT reclaims associated with suspected supply chain fraud.
The VAT and Duties Tribunal ruled HMRC’s decision to withold VAT reclaims from Mobilx for April, May and June 2006 was correct. The total in dispute was £7.3 million.
Mobilx made 85 purchases from UK VAT-registered companies during the three months in 2006, exporting goods to the US.
HMRC said all stock in question had been subject of fraud previously in the supply chain. It claimed Mobilex’s directors, including former Carphone Warehouse unit manager Steven Bell, had means of knowledge, if not actual knowledge, of the frauds.
The tribunal said: "Mobilx could not be confident of the integrity of its supply chains. Was it, or should it have been, apparent its transactions were more likely than not to be connected with fraud? The only possible answer is, yes."
• Meanwhile, four men from the West Midlands have been jailed for 22.5 years for money laundering and a £1.8 million VAT ‘missing trader’ fraud.
The gang diverted £1.8 million VAT in one month through trade of mobile phones in a chain of contrived transactions. HMRC seized money in raids (see image). Around £10 million of assets have been restrained including properties, performance cars and jewellery.
HMRC deputy director Chris Harrison said: "Criminals at the top of the crime ladder have been sent to prison for many years."