- VAT carousel fraud, also known as missing trader fraud, involves defrauding governments of VAT money
- Criminals acquire goods free of VAT and resell them with VAT added, then disappear without paying output tax
- Carousel fraud involves a series of transactions where goods are repeatedly bought and sold across borders
- Innocent businesses can be affected by carousel fraud, leading to VAT costs and input tax claims being refused
- Governments can deny input tax claims based on the “Kittel” principle if businesses should have known about the fraud
- Due diligence and risk assessment are crucial for businesses to avoid being caught up in carousel fraud
- HMRC provides guidance on due diligence and risk assessment to help businesses avoid VAT fraud.
Source: marcusward.co
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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