Am I At Risk?
MTIC Fraud is found in numerous industries, including, but not limited to Alcohol, Soft Drinks, Road Fuel Oils, Computers and related goods, Mobile Telephones and related goods, Electronic goods, Jewellery, Textiles, Clothing, Perfumes, Medical Equipment and Metals. There is a risk of becoming the victim of MTIC fraud when dealing in almost any goods.
To combat this HM Revenue and Customs (HMRC) are able to issue businesses with joint and several liability assessments and take other severe measures against businesses and individuals; see our sanctions page for further information.
HMRC have also issued a Statement of Practice detailing the circumstances where they will disallow input tax recovery if they are not satisfied with the invoices you receive from your suppliers. They say an invoice is invalid if "some or all of the details do not relate to the person/business that made the supply (i.e. if the supplier is using a hijacked registration) or the details shown are those of a company that has gone into liquidation or is missing at the time the supply is made."
This Statement of Practice specifically states that these measures will apply to businesses in the following industries:
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Alcohol - those alcoholic liquors liable to excise duty, which are defined by section 1 of the Alcoholic Liquor Duties Act 1979 or in any regulations made under that Act (e.g. spirits, wines and fortified wines, made-wines, beer, cider and perry).
- Oils - all oils that are held out for sale as road fuel.
- Computers and any other equipment - including parts, accessories and software, made or adapted for use in connection with computers or computer systems.
- Telephones and any other equipment - including parts and accessories, made or adapted for use in connection with telephones or telecommunications.
In practice they have applied these measures to a whole range of different industries based on the legal arguments they use to support this measure.
The reverse charge was implemented to counter MTIC fraud in certain industries, e.g. mobile telephones and computers. This measure disallowing input tax recovery can still be applied even when the reverse charge has been operated; see our reverse charge information page here
For further information generally on MTIC fraud and the measures applied by HMRC please see here. For further information on the how you can protect you business from both being the target of fraudsters and from receiving severe financial penalties and assessments please see here.
If you require and further information or assistance then please contact us on 0844 651 6852 or by email and we will be happy to assist.
