VAT: Fraud

Treasury written question – answered on 5th March 2007.

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Photo of David Burrowes David Burrowes Conservative, Enfield, Southgate

To ask the Chancellor of the Exchequer what average length of time investigations took to verify VAT claims which may be affected by missing trader intra-community fraud in the most recent year for which figures are available.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

HM Revenue and Customs does not collate the information requested and would incur disproportionate costs in doing so.

Each case of verification is treated on its own merits, the time taken to reach a decision being that required to fully establish the veracity of the claim. However, if at any time during the verification HM Revenue and Customs identifies that part or the entire claim is unconnected to MTIC fraud and is otherwise valid, HM Revenue and Customs will make prompt repayment of the amount.

The UK courts have, to date, supported HMRC's policy.

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R Kalia
Posted on 7 Mar 2007 9:21 pm (Report this annotation)

This response is wholly untrue. No prompt payments are being made - not even for basic overheads. Where activity is proven not to be part of the MTIC sector and where vat has been totally accounted for (i.e. import to retailers or import to export) this is still being withheld in cases that I am aware of. There are claims totally unconnected to MTIC fraud and HMRC are failing to pay promptly if at all. They are collecting the vat and but not repaying it - HMRC are not losing anything and actually profiting from businesses who are paying the vat and driving them into hardship. I assume deliberately for some reason or other.