What is a missing trader intra-community (MTIC) or carousel fraud?
Missing trader intra-community (MTIC) fraud is a VAT fraud that exploits the fact that the movement of goods between EU member states is free of VAT. At its simplest, MTIC fraud involves importing into the UK low bulk, high value goods, such as mobile phones or computer chips, from a supplier in another EU state free of VAT. They are then sold to another UK company and VAT is charged on the sale in the usual way. Instead of the company that sells the goods within the UK paying the VAT charged on the sale to Her Majesty’s Revenue and Customs (HMRC), they disappear – hence the term ‘missing trader’. The ‘missing trader’ tends to operate for a short period of intensive trading in an effort to avoid preventive action, before disappearing. There are variants of this form of fraud. One involves traders who simply default on the payment of VAT that is owed (called ‘defaulting traders’), and another involves hijacking the VAT registration numbers of legitimate companies. Thereafter, there are
