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Budget 2007 podcast

Tax Rates & Allowances

Missing trader fraud

From 1 May 2007 HMRC will have powers to direct that a business purchasing electronic goods, including SatNavs and certain sorts of electronic equipment for personal amusement and entertainment purposes, will be jointly and severally liable for VAT if the purchaser has reasonable grounds to suspect that VAT will go unpaid elsewhere in the supply chain. This extends the current provisions which apply to mobile phones and computers etc.

Our view
This measure extends the current joint and several liability provisions beyond the list of electronic goods included in the domestic reverse charge provisions and is another measure to help HMRC combat missing trader fraud. Purchasers of goods listed under the new provisions will need to take extra care to ensure that they have taken all reasonable steps to satisfy themselves that they are not purchasing goods which are being used in such a fraud.



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