VAT Fraud Lawyer

VAT (Value Added Tax) fraud is one of the most common types of fraud worldwide. It is treated as a separate offense, regarded as a form of criminal activity. Investigations into such matters can negatively impact the future operations of businesses, affecting their financial status. However, these checks are not always conducted on a lawful basis. To ensure that a company’s reputation remains intact throughout the VAT fraud investigation process, it is essential to seek qualified legal assistance.

What is VAT fraud and HMRC?

VAT fraud represents a specific type of evasion from paying mandatory tax levies. As a result, a firm or company engages in the following illicit actions:

• They do not collect the mandatory tax which they are required to collect, according to the law;
• They levy a mandatory tax but do not pay the VAT owed to the HMRC (Her Majesty’s Revenue and Customs).

Today, there are many different types of VAT fraud cases, which are considered financial crimes. It’s necessary to examine the most common ones, which are actively used in various sectors:

1. Intentionally understated sales of various services and goods.
2. MTIC or carousel fraud – Missing Trader Intra-Community Fraud, occurs when many companies are involved in a single scheme. Most often, these companies are interconnected through a corresponding “chain” of trade relationships.
3. Excessively high demands regarding refunds in the event of a product or service cancellation, taking into account all possible reasons.
4. The sale of goods and services offered in domestic markets, which are processed as exports.
5. Use of fraudulent (fake) VAT registration numbers by potential taxpayers.

Companies and various enterprises wishing to sell their products or raw materials to European countries must obtain a VAT number (Value Added Tax). This is an identification number that all firms registered in the EU receive. Without this number, an enterprise cannot legally conduct trade relations with other European companies, as the payment of Value Added Tax is mandatory. However, mandatory registration as a European VAT payer – the equivalent of VAT – is not always necessary.

To understand more about the need for this procedure, one can seek advice from a specialist VAT fraud solicitor. This will help clarify the established sales thresholds in each EU country. Typically, these thresholds range from 15,000 euros to 100,000 euros per year. However, if a company’s annual turnover does not exceed these limits, registering as a VAT payer is not compulsory. Thus, the business owner is not breaking any laws and can decide independently whether to register or not.

How VAT Fraud Works?

Different methods of tax evasion have various systems of penalties. To understand such punishments, it’s initially important to consider how VAT fraud occurs.

Today, many methods of such fraud are known, among which the following are called the most common:

1. Using cash – Shop owners, various businesses, and enterprises might ask a customer to pay for a service or purchased goods in cash so that the payment amount isn’t recorded in the system along with the fact of the sale (or other transaction).
2. Transferring money in another person’s name – When the transfer of funds is made not to the company owner’s name but to other accounts that are not registered in the tax system.
3. Fake VAT registration numbers – This list encompasses all sorts of manipulations related to counterfeit numbers: when, by law, a business is a taxpayer, but this number was acquired through unlawful actions.
4. Making multiple payments to different individuals or companies – In certain situations, a single amount can be split into several smaller payments, which are then credited to different names – different individuals, different firms.
5. The enterprise is not registered as a taxpayer – This is the simplest and most dangerous method when a business, which must be registered as a VAT payer, has not undergone this registration process.

In practice, there are many other equally common situations and cases. For instance, individuals and businesses submit fraudulent (inflated) refund claims to deceive HMRC. Some companies also report incorrect amounts of goods sold or services provided, while others ignore information indicating that sales made within the UK should be classified as “export”.

Punishments for VAT fraud

Tax evasion carries a vast array of consequences. In certain situations, it can lead to criminal proceedings and imprisonment, with the maximum sentence reaching up to 10 years.

In addition, other common punishments are possible:

• The imposition of a fine – the amount of the fine depends on the sum that has already been withdrawn or is planned to be withdrawn from the HMRC (for example, as a percentage of specific income for 1 week of sales of goods/services, etc.). The amount is revealed after HMRC investigations when VAT fraud allegations are made.
• The dismissal of a company’s director often tends to be temporary and is regarded as the director being temporarily relieved of their duties for a specified period.
• Confiscation involves the seizure of all profits that were earned by the company or enterprise through illegal means (those that were not taxed).

All other penalties related to tax evasion are associated with situations where the case is considered in court. In such instances, several agencies like the National Crime Agency (NCA), HM Revenue and Customs (HMRC), and the Serious Fraud Office are involved in criminal investigations, while a judge issues the final verdict.

How can we help?

The mandatory is considered no less important than criminal defense. For high-net-worth individuals who have been mistakenly charged with VAT fraud, a simple error in the system or human factor can lead to innocent people being accused of matters with which they have no connection. Therefore, qualified assistance and professional support from expert VAT fraud solicitors are indispensable.

Our VAT fraud solicitor offers their assistance in resolving such matters.

• Consultation and assistance in the investigation of all matters related to VAT investigations to avoid harsh consequences.
• Protection against prosecution for VAT fraud in various countries;
• Legal support and VAT investigation defence (if the criminal case has already been referred to court);
• Contesting an unlawful money confiscation procedure.

The primary goal of an international lawyer is to secure a fair resolution for specific fraud cases, protecting the rights, interests, and freedom of their client.

What to do if you’re accused of VAT fraud?

If you’ve been accused of VAT fraud, it’s crucial to immediately seek legal advice from experienced VAT fraud solicitors for a robust defence. It’s unwise to delay tackling the issue, as a qualified international lawyer will be able to delve into the nuances of the case in greater detail. Promptly seeking legal assistance can help prevent the possibility of wrongful accusations and significant disruption of your business.

Therefore, if you find yourself accused of VAT fraud, facing dubious evidence and false accusations, it’s advisable to call our experienced white-collar crime lawyer.

VAT and HMRC lawyers

Have you been wrongfully accused of VAT fraud? Could you be facing criminal charges? Our team of qualified international lawyers is ready to assist you.

Our specialists have extensive experience and the necessary expertise in dealing with various cases of fraud, and the expert opinions of our solicitors often help to resolve matters out of court. Call us right now to receive high-quality legal advice as soon as possible.