Missing trader tax fraud cases to end by 2015 as crooks target gaming market


Law firm says fraudsters are diverting their attentions because of comprehensive HMRC rules on missing trader intra-community fraud 

Mobile phone ‘missing trader’ (MTIC) tax fraud will be obsolete in the UK by the end of 2015, a leading lawyer has said.

Liban Ahmed (pictured) from law firm CTM Limited told Mobile News that HMRC rules on missing trader intra-community (MTIC) fraud regarding mobile phones are now so comprehensive, fraudsters are turning their attentions to games and gaming consoles instead.

HMRC introduced anti-fraud measures in June 2007, which meant purchasers of mobile phones in the UK, rather than suppliers, had to account for any VAT due – known as the ‘reverse charge’.

Ahmed said due to the procedure evolving to cover all areas of MTIC fraud from mobile phone traders, his firm now sees an end to fraud in this sector.

The latest change to HMRC policy targets companies that try to escape reverse charge rules by buying handsets in small batches, rather than in bulk (only purchases of over £5,000 are subject to the policy).

New rules place additional responsibilities on retailers and wholesalers to take “sufficient steps” to ensure their customers are not seeking to circumvent the £5,000 minimum.

Retailers must monitor buying patterns and people making multiple purchases on a daily basis, particularly those under £5,000 – as they may be attempting to avoid being subjected to reverse charge rules.

If there are “reasonable doubts” that the customer is VAT registered, or if they think they are trying to bypass reverse charge rules by splitting up their orders into small chunks, they must charge the buyer VAT.

Ahmed said the firm currently has 15 cases relating to MTIC dating back to 2006, which once complete, will mark the end of such cases involving mobile.

Ahmed said: “By the end of 2015, all these mobile phone cases should be done and dusted.”