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MTIC or Carousel Fraud: Is it still happening?

Cartwright King’s MTIC Fraud expert, Mark Fowler, says, “Undoubtedly!”

Although there may not have been very many of the large scale “knocks” carried out by HM Revenue and Customs over the last few years compared to the period of the early to mid 2000’s, this is an area which HMRC still regard as a problem and a priority. Their tactics however appear to have significantly changed. The focus is now upon more widespread disruption of traders considered to be suspect and the taking of civil action with a view to either recovering disputed VAT or putting the suspect trader out of business.

A traders problems may appear minor when the initial enquiries start but a failure to deal with these effectively will lead to assessments for VAT being raised based upon the principles set out in the “Kittel” and “Halifax” cases in the ECJ. Cartwright King has the necessary experts to assist in dealing with these issues. Early recognition of the issues can make all the difference.

If assessments are raised against a trader, an early decision needs to be made as to the action to be taken. A request by a local review or an appeal to the lower Tax Tribunal? Failure to take prompt action can be fatal. HM Revenue and Customs will pursue winding up proceedings against a company where they are able. The recent Court of Appeal decision in the “Changtel” case illustrates how important it is not to allow HM Revenue and Customs the opportunity to seek a Winding Up Order.

Civil action may not stop with winding up proceedings. There is the possibility that HM Revenue and Customs may also have levied penalties against the trader. Few realise that Directors or those in control of limited companies can be made personally liable for those penalties. A separate request for local review or an appeal against the decision may need to be made. Whether or not such action is taken, Directors of limited companies or those who have acted as shadow directors may find themselves pursued separately by the Department of Business Innovation and Skills by way of Directors Disqualification Proceedings for having involved their company in MTIC or Carousel trade.

Cartwright King has the necessary experts to deal with all aspects of these interlinked issues. Time is however of the essence. A failure to act now may result in significant problems in years to come. Contact:
Mark Fowler, Director and MTIC Fraud Solicitor on 07767 835 080 or email

Sundeep Soor, Director and Head of Tax & Fraud, on 07973 148738 or email

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