HMRC warns over game stock deals

Retailers must be more vigilant with rogue traders if they want to avoid having their tax returns voided.

As we revealed on the cover of this issue, Her Majesty’s Revenue & Customs is mounting efforts to clamp down on temporary dodgy distributors who sell on games stock without paying VAT.

And when those buying the stock try to claim tax back, they could get a shock as HMRC is obligated not to pay out.

The scenario described is known as Missing Trader Intra Community or MTIC fraud,” HMRC’s Steven Pope explained to MCV.

HMRC have identified suspected MTIC fraud via supplies of games consoles. Where MTIC fraud is suspected, HMRC is duty bound to verify transactions to ensure that the VAT has not been defrauded.

Where HMRC identify fraud and can demonstrate
that a trader knew or should have known that their trading was linked to VAT fraud then HMRC will deny repayment of any VAT linked to those transactions.”

HMRC is working closely with businesses to raise awareness of MTIC fraud, with advice on how to identify suspected trading available at the HMRC website.

Pope added: Businesses can help protect themselves from this threat by undertaking good risk management and KYC checks as part of their normal compliance and risk management processes. If a transaction appears to be too good to be true then it probably is.”