The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides an overview of what constitutes MTIC fraud and the action that can be taken by HMRC to combat this type of fraud. This note should be read in conjunction with the MTIC fraud ― application of the domestic reverse charge for mobile phones and computer chips and MTIC ― carbon emission trading guidance notes.
The UK has also introduced several domestic reverse charge measures and details of these can be found in the Domestic reverse charge ― wholesale trading in electricity, gas and electronic communications services and construction labour and Supplies of non-investment gold guidance notes.
MTIC fraud basically works when a supply chain is created and, at some stage, a key player in the supply chain disappears. The chain normally involves goods being purchased from a supplier in another EU country, who does not charge VAT to the UK customer because the business is given the customer’s UK VAT number. The business acquiring the goods from the EU supplier normally sells the goods onto another UK company and charges VAT but fails to pay this output VAT to HMRC. Please note that services can also be subject to MTIC fraud as well.
HMRC has introduced a number of measures to try to tackle this fraud, which are covered in more detail later in this guidance note:
HMRC has also introduced a reverse charge provision which
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