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Carousel Fraud

Volume 455: debated on Thursday 18 January 2007

To ask the Chancellor of the Exchequer what extra resources have been allocated to HM Revenue and Customs to deal exclusively with carousel fraud. (115443)

Approximately 1,000 extra staff were allocated to HM Revenue and Customs as part of the overall VAT Compliance Strategy (VCS) in 2002-03 which included VAT Missing Trade Intra-Community Fraud as one of its priorities.

However, HMRC applies a risk-based approach to the deployment of its existing resources and has responded to the increased threat of MTIC fraud during the past year. A total of 1,500 staff are now engaged in countering MTIC fraud across the Department following an additional redeployment of 700 compliance staff since Budget 2006.

To ask the Chancellor of the Exchequer what measures are taken by HM Revenue and Customs to ensure innocent companies are not unduly affected by lengthy investigations into carousel fraud. (115444)

HM Revenue and Customs’ response to the increased threat from MTIC fraud has been proportionate, targeted and risk-based. In response to the rapid increase in MTIC activity last year, HM Revenue and Customs are actively checking a greater number of claims but as soon as they are satisfied that even part of a claim is properly payable, it is immediately repaid. The traders whose claims are subject to this extended verification represent a tiny proportion of over 1.9 million VAT-registered traders and the money withheld a fraction of the £50 to £55 billion that is repaid every year. HM Revenue and Customs recognise the importance of VAT repayments to legitimate businesses and have therefore deployed additional resources to ensure that verification of these claims can be carried out as effectively and efficiently as possible.

To ask the Chancellor of the Exchequer (1) how many companies were subject to investigations into carousel fraud in the last 12 months; (115445)

(2) how many prosecutions for carousel fraud were initiated in the last 12 months;

(3) how many carousel fraud prosecutions were completed in the last 12 months.

To ask the Chancellor of the Exchequer (1) how many prosecutions for carousel fraud there have been in each of the last five years for which records are available; (116011)

(2) how many of the defendants in cases of carousel fraud were known to be part of organised crime gangs in each of the last five years for which records are available.

Details of the investigations and prosecutions conducted each year by HM Revenue and Customs are published in the departmental annual report and, prior to the creation of HM Revenue and Customs, were published each year in the annual reports of both the Inland Revenue and HM Customs and Excise. Copies of the annual reports are available in the Library of the House. Where the specific information requested is not published, it is not collated in that format.