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Missing Trader Fraud

Volume 447: debated on Monday 12 June 2006

To ask the Chancellor of the Exchequer what estimate he has made of the cost of missing trader fraud for each quarter since 1997 (a) in cash terms and (b) cost adjusted for inflation. (75931)

HMRC's latest annual estimates of total MTIC fraud were published in “Measuring Indirect Tax Losses-2005”, which is available from the House of Commons Library. A quarterly breakdown of these estimates is shown in Table 1, along with the corresponding constant price time series based on 1999 Q1 prices.

Measuring the size of MTIC fraud is inherently difficult. Therefore, the figures are presented as a range.

Due to lags in data becoming available, the annual estimate for 2005-06 cannot be published until PBR 2006. The associated quarterly figures will not be available until this time as their release could compromise the pre-announced publication.

Table 1: Quarterly estimates of MTIC fraud at current prices and constant prices (1999 Q1 base)1

£ billion

Current price

Constant prices

Upper limit

Lower limit

Upper limit

Lower limit

1998

Q4

0.52

0.24

0.52

0.24

1999

Q1

0.52

0.21

0.52

0.21

Q2

0.59

0.23

0.58

0.23

Q3

0.55

0.26

0.54

0.26

Q4

0.58

0.29

0.57

0.28

2000

Q1

0.87

0.38

0.85

0.37

Q2

0.82

0.28

0.79

0.27

Q3

0.73

0.34

0.70

0.33

Q4

0.61

0.33

0.58

0.31

2001

Q1

0.63

0.36

0.60

0.34

Q2

0.58

0.35

0.55

0.33

Q3

0.69

0.40

0.65

0.38

Q4

0.77

0.45

0.73

0.42

2002

Q1

0.82

0.54

0.77

0.51

Q2

0.81

0.57

0.75

0.53

Q3

0.74

0.35

0.69

0.32

Q4

0.55

0.31

0.51

0.28

2003

Q1

0.56

0.31

0.51

0.28

Q2

0.51

0.27

0.46

0.24

Q3

0.40

0.22

0.36

0.20

Q4

0.56

0.28

0.50

0.25

2004

Q1

0.52

0.27

0.46

0.24

Q2

0.54

0.27

0.47

0.24

Q3

0.55

0.29

0.48

0.25

Q4

0.63

0.29

0.55

0.25

2005

Q1

0.58

0.29

0.50

0.25

1 The complexities of the methodology used to estimate MTIC fraud are such that there will be minor discrepancies between these quarterly figures and the published annual estimates.