Fraud: some general fraud indicators
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
There is any number of indications of fraud that you may find on your assurance interventions, the following are an example
- a trader’s lifestyle
- false documentation
- incorrect VAT numbers
- sudden changes in a company’s trading pattern
- repayment traders, cash traders, poor revenue history etc.
- a trader dealing in high risk commodities such as mobile phones and computer chips
- exports to sensitive destinations and exports of sensitive goods
- complicated methods of payment for goods
The Exports and Removal UoE have seen the most common paperwork involved with commercial export procedures and thus what you can reasonably expect to see as evidence of export. Accordingly, missing paperwork, missing or incorrect details and false documentation may all arouse your suspicion. If you are suspicious you should follow the tried and tested procedure of getting as much information as possible - then follow local procedures. Contact the Export and Removal of Goods Unit of Expertise (UoE) if you want further advice. See VEXP10600 for contact details.
You should also be aware that any problems with VAT could be carried through to other regimes and taxes and liaison with the relevant colleagues may be appropriate.
So, what can you look for as reasonable indications that fraud may be occurring?
- Are the documents/faxes photocopies?
- Have any details on the documents been altered?
- Have the correct VAT registration numbers been used?
- Are the customs stamps genuine?
- Have the correct forms been used?
- Has payment been received for exported goods from the declared destination?
- Has there been a sudden increase in the volume of exported goods?
- Has there been an increase in repayment claims - not claiming on a monthly basis?
- Is the trader claiming to use “export” houses?
- Typed documents - do many documents share the same typeset?
- Is there realistic insurance cover?
- Is there evidence that the goods existed?
- Are weights, values and quantities the same as on associated documents?
- Are the goods easily marketable in the UK e.g. clothing and personal computers?
- Are the invoices folded? (most genuine invoices are folded for posting)
- Has the ultimate destination been altered/hidden?
- Is there unusual routing of goods and/or vague description of goods?
- Is inappropriate language used on documentation?
- Has there been an increase in exports to “sensitive” or diversionary destinations - see VEXP120070.