Accused of an MTIC Fraud ?

Investigated for VAT Fraud ?

Specialist Defence Lawyers

Tax Fraud Lawyers

If you have been accused of an MTIC, VAT or Carousel Fraud it is important to get immediate advice and Specialist help. By definition Carousel Fraud's are necessarily complex and HM Revenue and Customs often carry out long drawn investigations. The investigation or prosecution needs to be handled strategically and with care to get the right outcome.

We at Rahman Ravelli have expertise in dealing with complex cases and have been recognised as such. We are members of the Specialist Fraud Panel an officially approved small nationwide panel of Fraud Solicitors.

We can provide immediate advice 24/7 Nationwide. We will assemble a specialist team led by a Senior Lawyer to deal with your case because we understand in Carousel Fraud prosecutions you need to be confident that no stone is left unturned and your defence is pursued robustly ! (see also Pro- Active Defending)

Our reputation ensures that we are able to instruct the best Experts on your behalf including Forensic Accountants and Specialist Barristers.

PREPARING YOUR DEFENCE

What is a MTIC Fraud or Carousel Fraud ?
Missing Trader Intra Community (MTIC) VAT Frauds (or Carousel Frauds) have been the topic of much discussion. The basic idea is that goods, usually high value technical goods such as mobile phones, CPUs or other computer chips are imported VAT free from E.U. countries. The goods are then sold on at VAT inclusive prices and the original dealer (or a dealer further down in the chain) would then disappear without paying the VAT to the authorities. This basic operation would usually occur through a series of companies all liable to pay VAT. Sometimes the goods are re-exported back to the E.U. at which point the exporter reclaims the VAT from HMRC.

In large operations the trick is to understand completely how the prosecution link the various lines, or chains of companies. Conspirators may be accused of being party to a sham company or to allowing their company to 'go to the wall' - i.e. the companies VAT number will be used until the, up to then, legitimate company then disappears. These frauds are taken very seriously as they are costing the Government billions in lost revenue. Establishing patterns of trading is what both the prosecution and defence will probably have to concentre on as well as possibly a consideration of lifestyle issues.

Traders may find themselves under suspicion purely because they have started to import CPUs, or mobile phones - the first a suspect may know that he is in trouble is being told that his bank account has been frozen by way of a Crown Court Restraint Order under the Proceeds of Crime Act 2002 and also possibly being served with orders for disclosure of documents. There will then be immediate problems as to living expenses and possible variation applications as the suspect - who may not have even been questioned by police at this stage, struggles to keep his life and business afloat.

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Innocent 3rd Party Companies

The biggest problem the Crown has had is dealing with the purchasers who all claim to be innocent. They are entitled to claim back the VAT that has been paid out by them. The Government's approach was simply not to re-pay these sums - the justification being that the deals were non-commercial for VAT purposes and therefore no rebates were necessary. Customs were challenged and they lost. In a High Court reference to the European Court of Justice the Court held that in the UK's approach to tackling carousel frauds, it was wrong to refuse to grant VAT rebates to innocent third party companies caught up in the scam; Optigen Ltd & Fulcrum & Ors v Commissioner of Customs and Excise (OJ C251 of 18.10.03).

The reaction to this judgement has been the recent introduction in Parliament (House of Commons 5th July 2006) of a proposed 'reverse charge'; i.e. it is proposed that it will no longer be the seller's responsibility to account for and pay VAT to HMRC but that of the customer in the case of the sale of certain hi-tech goods.

Defence investigation and preparation

As long as there are taxes there will be bootleggers and tax evaders and, of course, 'duty men' to pursue them. Given the broad variety of prosecutions there can be no general advice to those faced with a 'cheating the revenue' type prosecution. But it is always worth remembering that despite the resources that State puts behind prosecuting these cases the authorities, can and do get it wrong just as much as they can and do get it wrong in any other type of criminal case. There are pitfalls for the Crown; their case may sometimes be just too complex for a jury to be sure; they might confuse knowledge with participation in an importation case or the defence, through sheer hard work, may be able to show that a 'rogue trader' is in fact a legitimate business man just trying to do his best. There might, in some cases, have to be a great deal of investigative or accountancy work to be undertaken by the defence team - or it simply may all come down to inferences from some phone traffic. Whatever the case, as usual, early preparation and keeping the maximum pressure on the prosecution, is the only key to a successful outcome.

Contact our Specialist Carousel Fraud Team for Advice.

Take Immediate Steps

Related Subjects

Fraud: Tax Evasion & Money Laundering
Bootlegging and Duty Evasion
Freezing your Assets
Confiscation Orders

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Rahman Ravelli Solicitors Ltd (Company Registration No.6295702) are leading Criminal Defence Lawyers regulated by the Solicitors Regulation Authority.
We are Solicitors specialising in the defence of Serious Fraud, Serious and Complex Crime and Asset Forfeiture (including SOCA (Serious and Organised Crime Agency) Civil Recovery), Nationwide.
We are Specialist Panel Members (Fraud and VHCC) able to undertake the most Complex of cases.

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