On the carousel
A director of a wholesale mobile phone company has been banned from running businesses for 12 years following his part in a VAT “carousel” fraud.
William Robert Howard, 45, a director of the now liquidated Expeditors Limited, based in Oxford, was involved in Missing Trader Intra Community fraud (MTIC).
The mobile phone business was incorporated in 2004 and a petition was made to wind up Expeditors in June 2017 by HM Revenue & Customs, regarding an unpaid VAT bill of £22,545.
The Insolvency Service then conducted an investigation, which focused on the mobile phone company’s participation in the fraud. Commonly known as “carousel” fraud, MITC fraud sees large consignments of high-value electrical or small items invoiced rapidly and repeatedly around trading chains.
On paper the goods look like they are being moved repeatedly from customer to customer, but the goods are only moved as they enter or exit the UK. In the case of Expeditors, Howard used the scheme to offset VAT and reclaim close to £350,000 in the firm's 2005 to 2006 VAT return.
Examples of MITC conducted by Howard were indicated by the rapid succession of same-day trades within the UK, but goods weren’t delivered and remained on a shared freight forwarder. There were common uses of the same offshore bank, said the Insolvency Service, as well as payments being arranged with third parties who were neither suppliers nor customers.
Additionally, all the traders involved banked with the First Curacao International Bank, which was shut down by the Netherlands Antilles authorities in September 2006 in order to prevent money laundering.
Howard’s disqualification started on 5 February 2018 and means that he cannot promote, manage, or be a director of a limited company until 2030.
Anthony Hannon, official receiver at the Public Interest Unit of the Insolvency Service, said: “This type of VAT fraud is very serious and a high priority for HMRC and the Insolvency Service. MTIC fraud has caused loss to the public purse and has cost the tax payer substantial sums in fraudulent VAT claims. The Insolvency Service is committed to making directors accountable for their actions.”
