GB/EU: House of Lords report on MTIC fraud in the EU

Report (176 pages, PDF) of the European Union Committee of the UK House of Lords, entitled "Stopping the Carousel: Missing Trader Fraud in the EU". The report considers the actions taken to date in tackling MTIC fraud, notably HMRC's extended verification strategy, and finds that these are ineffective in preventing the occurrence of the fraudulent activity and, given the resources they demand of HMRC, are unsustainable.

The report puts forward a number of options of how to reform the VAT system in order to address the problem. The options considered include (1) the adoption of generalised reverse charging, (2) introducing a destination system (exporters charge VAT of country of destination) and (3) an origin system (exporter charges VAT of country of origin) with variations relating to whether a EU-wide flat rate is applied, and whether a clearing house is set up.

The UK government is invited to respond on the relative merits of the different options considered.

The evidence submitted to the committee in the course of its inquiry is included in the report.

For further information or advice please contact Pedro Fernandes.

Filed under HMRC, Tax fraud, UK parliaments, VAT.

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