DMBM875540 - RLS: Missing VAT customers: Definition and prioritisation of cases
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Definition
VAT registered customers are said to be missing when:
- they can no longer be contacted at the VAT registered address of the business and have not provided us with a new address, and
- the preliminary checks carried out by the DTO do not locate a current address for the customer (DMBM875560).
High priority cases
Customers that fall into any of the categories below may represent a particular risk of loss of revenue and should be dealt with as soon as there is any indication that they may be missing. We consider the following factors may merit priority action (this list is not exhaustive):
- there is evidence that large sums of revenue may be at risk
- recently registered customers (payment or repayment)
- payment traders submitting repayment claims
- repayment credibility queries reveal that a customer is missing, or
- fraud is indicated (a list of potential fraud indicators can be found at DMBM875550).
Insolvency
It may be possible to start or to continue insolvency proceedings (bankruptcy or winding up proceedings) if a trader goes missing. Current referral limits are £5000 for England, Scotland, Wales and NI and £10,000 for Deregistered customers.
A notice can still be served on a limited company at the registered address. The insolvency review code is 484 for EIS. If you identify a customer as missing, and review code 484 is set, notify EIS (Enforcement & Insolvency Service) immediately. EIS guidance can be found at DMBM685000.
The National Insolvency Unit (NIU) has a separate review code 521.
Investigation in progress
Where preliminary checks on DTR or EF show that a criminal investigation or prosecution is in progress, contact the relevant Criminal Investigations/ LE officer before taking any missing trader action. Failure to do so promptly could prejudice any ongoing investigation.
Low priority cases
Not all customers who go missing do so as a deliberate attempt to avoid paying VAT. Some simply cease trading owing little or nothing and forget or neglect to tell us.
In cases where there is no indication of fraud, and little or no revenue is at risk, time spent tracing these traders may be better spent tracing high-priority missing traders.
It may be more appropriate for the DTO to remove the trader from the VAT register (This content has been withheld because of exemptions in the Freedom of Information Act 2000), without referring the case to the DMB Tracing Group Cumbernauld for in-depth tracing action. The missing trader review code 309 should still be set.
Presence of the following factors may merit low-priority action (this list is not exhaustive):
- a trader goes missing during deregistration and has a debt of less than £200, or
- a payment trader within a debt of £50 or less is reported missing
- nil debts.