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Missing Trader Intra-Community Fraud

Volume 450: debated on Wednesday 11 October 2006

To ask the Chancellor of the Exchequer what recent discussions he has had with EU finance ministers on tackling Missing Trader Intra-Community fraud; what proposals he has put to the EU on measures to tackle MTIC; and if he will make a statement. (87179)

The Government are committed to working with our European partners to combat Missing Trader Intra-Community (MTIC) fraud across the EU.

The Chancellor attended ECOFIN in June, at which the European Commission’s Communication on tax fraud was discussed. The conclusions reached by the Council are set out in an Explanatory Memorandum submitted to the House by HM Treasury on 20 June (Communication from the Commission to the Council and European Parliament concerning the need to develop a co-ordinated strategy to improve the fight against fiscal fraud).

In order to strengthen further the Government’s strategy to combat VAT fraud, the Government announced on 26 January 2006 that it had written to the European Commission for a derogation to introduce a change in the VAT accounting procedure for certain goods. The request is progressing well through the EU process. There is no fixed timescale for that process but HMRC has recently advised businesses that, based on current progress with the derogation, it expects to introduce the accounting change on 1 December 2006. Finance Act 2006 includes an enabling clause for the introduction of the change.