MTIC and Missing Trader fraud come in many guises and can involve complex trading chains and contra-trading chains which are often designed to avoid scrutiny by HMRC.
A simple form of the fraud is for a taxable trader to ‘go missing’ after having collected VAT on its sales and fails to account for that VAT to HMRC.
MTIC fraud involves taxable traders exploiting the laws relating to cross border transactions within the EU due to zero rated supplies on export and the ability to seek VAT repayment claims from HMRC.
Carousel frauds involve the same product or commodity being passed around a number of traders with the goods (at least in part) often returning to the original taxable supplier. Evidence of such transactions is often adduced by HMRC to demonstrate the alleged ‘artificiality’ of the trading.