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The world of VAT is very confusing, it is often hard enough to fill in your personal VAT and tax forms let alone your businesses!
However with the country still in the grips of a recession there has been a light shone on the world of VAT and more specifically VAT fraud with particular relation to business. It has been proven that the risk of fraud is directly proportional to the economic downturn as business and society feel the pinch with over £2 Billion worth of fraud being reported in the UK last year.
As a result there has been an increase in and the crack down off fraud gangs such as those caught earlier this year in southern England. With the suppression of fiscal boarders in Europe this has opened up new, more sophisticated and innovative areas of fraud such as 'carousel fraud' which was the technique used by the East Midlands fraud gang who were found to have avoided paying £37.5 Million through VAT fraud of their computer chip import and export business. There have also been cases of petrol garages selling on unclaimed VAT receipts to VAT registered companies such as taxi companies who can then claim back the VAT from the taxman as if they had paid it. The number of scams around are countless and continually evolving as gangs continually develop more innovative ways to conduct their business so not to get caught.
With fraudulent companies masquerading as a legitimate business, the market place has become a dangerous place for your business with fraud threats from both the supplier and the client. Handling with even the smallest fraud issues can have a large impact on a business, eating into valuable staff and management time, shaking large businesses to the core and potentially destroying smaller, less established companies. Fraud impacts business not just financially but also upon a company's brand reputation and customer loyalty which could affect longterm business prospects. As a result it has never been so important to protect yourself and your business against fraud as an essential matter of your recession survival.
However with the country still in the grips of a recession there has been a light shone on the world of VAT and more specifically VAT fraud with particular relation to business. It has been proven that the risk of fraud is directly proportional to the economic downturn as business and society feel the pinch with over £2 Billion worth of fraud being reported in the UK last year.
As a result there has been an increase in and the crack down off fraud gangs such as those caught earlier this year in southern England. With the suppression of fiscal boarders in Europe this has opened up new, more sophisticated and innovative areas of fraud such as 'carousel fraud' which was the technique used by the East Midlands fraud gang who were found to have avoided paying £37.5 Million through VAT fraud of their computer chip import and export business. There have also been cases of petrol garages selling on unclaimed VAT receipts to VAT registered companies such as taxi companies who can then claim back the VAT from the taxman as if they had paid it. The number of scams around are countless and continually evolving as gangs continually develop more innovative ways to conduct their business so not to get caught.
With fraudulent companies masquerading as a legitimate business, the market place has become a dangerous place for your business with fraud threats from both the supplier and the client. Handling with even the smallest fraud issues can have a large impact on a business, eating into valuable staff and management time, shaking large businesses to the core and potentially destroying smaller, less established companies. Fraud impacts business not just financially but also upon a company's brand reputation and customer loyalty which could affect longterm business prospects. As a result it has never been so important to protect yourself and your business against fraud as an essential matter of your recession survival.
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