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HMRC internal manual

VAT Fraud

From
HM Revenue & Customs
Updated
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Contrivance: The way the taxable person trades: Movement

Aspects to consider include:

  • Does the customer take receipt of the goods?
  • Have the goods been brought into the UK before?
  • The timing and quality of the release documentation;
  • the timing and quality of the provision of CMRs (Convention des Marchandises Routiers);
  • the way the goods were transported, e.g.:

    • What evidence is there to support the movement of the goods?
    • Was the vehicle capable of transporting the quantity of goods sold?
    • Was the time taken to get from the freight forwarders / warehouse to the final destination of the goods reasonable?
    • Were the goods adequately insured whilst in transit (VATF64200)?

The above list is not exhaustive.

There is also the potential for irrecoverable acquisition tax, as per the case of Staatssecretaris van Financiën v X; Staatssecretaris van Financiën v fiscale eenheid Facet BV/Facet Trading BV (joined cases C-536/08 and C-539/08)). Further guidance will be released at a later date.

If a customer from one country asked that goods to be moved to an address in another country it might be expected to have led the taxable person to ask further questions. This situation also raises concerns over who is liable if the transaction collapses (VATF64100). Much here will depend on the terms of the contract (if one exists). Where a taxable person moves his own goods to another EU Member State this is considered to be a deemed supply for VAT purposes. If the transaction is not completed at this stage and collapses then VAT would be due from the taxable person (unless they are registered in that EU Member State). Furthermore the taxable person would be liable for the transportation costs to bring the goods back.