Question 1

Will I go to prison for VAT fraud?

Accepted Answer

Many people who have committed VAT fraud do not get charged and taken to court. HMRC will sometimes be content with fines in the form penalties. Even if the case goes to court and a person is convicted, not everyone goes to prison. Sentences can be suspended if the judge intends to impose 24 months or less. A judge will take into account will be the amount of loss or intended loss to the revenue, the personal mitigation and previous record of the defendant, and the role the defendant played in the offence.

Question 2

Will I lose my home or assets if I am convicted of VAT fraud?

Accepted Answer

Confiscation proceedings often follow a VAT fraud conviction, but this doesn't mean that people definitely lose everything they own. The court will take into account the value of the original case, and the extent to which assets which have been in the defendant's hands going back 6 years can be regarded as having come from clean sources. Courts also have to take into account anyone else who has a financial interest in property who has not been convicted of any offence, such as wives or partners.

Question 3

Do all VAT fraud cases go to court?

Accepted Answer

Not all VAT fraud cases go to court. Many are dealt with by HMRC by way of financial penalties. Early advice and representation from specialist VAT fraud lawyers can be of great help in steering a case to a non-criminal outcome.

Question 4

Will my family be charged with VAT fraud?

Accepted Answer

If family members have been members of a company or signatories to bank accounts or tax declarations, there is a chance they will be charged. Being charged means that the case against them is brought to a criminal court. But HMRC deciding to charge does not mean that you will be convicted. You can only be convicted if you plead guilty or a jury find you guilty after a trial.

Question 5

This wasn't me - why have I been targeted in a VAT fraud case if someone else benefited?

Accepted Answer

HMRC will often charge a number of people in a conspiracy where a VAT fraud is suspected in a business or businesses employing staff. This doesn't mean you will be convicted. The prosecution have to prove that you knew and took part in a plan to defraud the VAT system.

Question 6

What does conspiracy to cheat the revenue mean?

Accepted Answer

Conspiracy to cheat the revenue is a legal phrase used to describe a person being part of a plan to defraud or steal from HMRC.

Question 7

What is MTIC or Missing Trader fraud?

Accepted Answer

MTIC or Missing Trader Intra Community fraud is a term which describes fraud on the tax authorities exploiting the VAT repayment scheme. It is called 'Intra Community' because it has often taken place using overseas transactions with companies in EU member states as a way of avoiding quick detection. The term missing trader fraud can also be used to describe less sophisticated frauds where a trader simply disappears and another trader fraudulently claims a VAT refund or refunds. Where goods are passed round over and over between a circle of fraudulent parties, the term 'carousel fraud' is often used.

VAT Fraud investigations can be dangerous. You need expert help to come out the other side.

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