Cunninghams Solicitors

What are Carousel/MTIC frauds?

Carousel fraud, also known as Missing Trade Intra-Community (MTIC fraud), is an example of VAT fraud. It can also be known as ‘missing trader’ fraud. It involves cases where VAT rules have been ignored, averted or abused during transactions of imported goods between different EU member states.

If you have been accused of any type of VAT fraud it can be a very worrying and stressful time. You may also be contacted by the Serious Fraud Office (SFO), HM Revenue and Customs (HMRC) or even the National Crime Agency (NCA). 

As leading fraud defence solicitors specialising in all types of VAT fraud, Cunninghams are here to support you during this time. We can explain the implications of the accusation, ensure that you understand your rights, and help you with next steps. Our initial advice is always free of charge. Contact us on 0800 051 2542 or enquire online.

What does Carousel/MTIC entail?

Carousel VAT fraud is a complicated and highly sophisticated process. Carousel fraud begins with the purchasing of goods from the missing trader, who has purchased these goods from a supplier in another EU Member State. This trader then sells the goods to another national business, and charges VAT. What should legally happen at this stage is that the trader should pay this VAT to the HMRC, however, a fraudster will not declare or pay its VAT liability.

The next stage of the process is that the business that has bought the goods then sells them onto another business, charging VAT and also paying the VAT received from the business before onto the HMRC. This process can continue until eventually a broker sells the goods to an EU customer. As this transaction is within the EU, the customer is not charged VAT.

Because the broker paid VAT in purchasing the goods, the broker can then reclaim the VAT from the HMRC. This amount is the VAT not paid by missing traders throughout the process, which means losses are experienced by HMRC.

In carousel fraud, the goods or services do not end up with an end consumer. Instead they go round, usually ending up back in the UK. The goods ‘carousel’ through other entities in EC Member States until they are again acquired by a UK VAT registered taxable person. The continuously cycling nature of this type of fraud is why it is given the name ‘carousel fraud’.

Carousel/MTIC fraud is often conducted by organised crime groups with links to illegitimate companies or individuals across borders. Sectors that are frequently targeted for carousel fraud include telecoms, mobile phones and other high-value electronic goods, precious metals, and gas.

What is the average sentence for carousel/MTIC fraud?

Carousel fraud is taken very seriously by HMRC as this type of VAT fraud costs the HMRC a great deal in lost tax. Carousel fraud is also damaging to the general public who are impacted by heavy VAT losses, as the lost tax money could have potentially been spent on improving public services such as the NHS, schools, and public transport. Furthermore, when any type of VAT fraud is committed by organised crime gangs, it is common for the fraudulent money to be used for funding other criminal activities, such as drug trafficking or terrorism.

For these reasons, carousel fraud can’t just be classed as a ‘victimless crime’, and the  consequences of a carousel VAT fraud conviction are serious. In 2012, the ringleader of a carousel fraud scam was imprisoned for 17 years after being found guilty of trying to steal £176m from the public purse in one of the largest and most complex mobile phone tax frauds yet uncovered.

If you find yourself in a position where you are being accused of carousel/MTIC fraud, it is pertinent to contact an experienced fraud defence solicitor as soon as possible so that you have the best chance of achieving a positive outcome from your case.

How can a fraud defence solicitor help?

If you have been accused or are facing charges of carousel/MTIC fraud it is vital that you get an experienced defence solicitor to represent you immediately.

Look for a fraud defence solicitor who has expertise and experience of dealing with cases of VAT fraud. They can help you prepare your defence as early as possible and achieve the best possible outcome from your case. Seeking the correct legal assistance as soon as possible can help you feel like you’re not alone in what can be a very stressful time. Your fraud defence solicitor can provide invaluable advice and support, and help fight your corner.

Cunninghams are Fraud Defence Solicitors based in Manchester and London, with over 20 years experience in defending clients facing charges of serious fraud. Our team of experienced conspiracy to commit crime solicitors have the expertise to help you build a strong case, and are here to support you at every stage.

It is never too early to seek expert legal advice if you are suspected of any type of fraud. Cunninghams initial advice is always free of charge. Contact us on 0800 051 2542 or enquire online.