Carousel fraud is is when goods or services revolve in and out of different EU member states. For example, imagine a UK business buys a product from France. This is zero-rated. The UK business then sells the product to another company in the UK and charges VAT. This trader then disappears without declaring the tax. This may happen several times, with the goods repeatedly being sold through different UK companies. Finally, the last company in the chain sells the goods back to a business based in France. The UK company can claim the reimbursement of VAT – even though VAT was never paid in the first place.