[holding answer 13 September 2006]: Estimates for the level of losses due to VAT fraud are not available. However, estimates of the VAT gap, which includes losses due to fraud and avoidance, are available in the paper “Measuring and Tackling Tax Losses-2005”, published in December 2005. A copy of this paper can be obtained from the House Library.
(2) what steps are being taken to counter VAT carousel fraud; and what mechanisms are being put in place to ensure that companies not under suspicion of fraud achieve prompt settlement of VAT repayment.
I refer the hon. Member to the answer I gave him on 2 May 2006, Official Report, columns 1455-456W. HM Revenue and Customs (HMRC) has committed significant additional resources to strengthen its strategy for tackling MTIC fraud, and there are now over 1400 staff engaged in that work.
In recent months, the level of VAT repayment claims from those suspected of trading in supply chains associated with MTIC fraud has risen considerably without known economic or commercial reasons. It is therefore only right that HMRC continues to take all necessary and proportionate steps to protect the tax base and satisfy itself that these repayment claims are valid.
HMRC does not hold the historic data necessary to answer this question and would incur disproportionate costs in producing such data.