Erm, is this real?
I've been taking these reports at face value, but I'm just not convinced here. Perhaps I don't understand how the fraud works?
As I understand it, the fraudster registers for a vat number and imports products from Europe vat free and is able to obtain somehow the discount price that established businesses can get. Lets say it's mp3 players, and somehow the supplier has enough stock in the channel to supply them immediately.
As a new business, he'd be required to pay 100% upfront because no supplier will extend credit to a new business.
They then sell on the things with VAT in the UK, so they apparently have the contacts required to immediately sell the mp3 players. Since the buyer could import the product themselves at the European wholesale price (and presumably they already have their orders in, they just don't sit around and wait for people to walk in off the street and sell it to them), the seller would have to offer a discount to close the deal and that would have to come out of this VAT profit margin.
Not only that they can collect the payments immediately, without extending the usual 30 days credit. Which is odd because they are a new business and must be selling to old existing businesses. That would be a buyers market, if the person can't unload more 83% of the stock then they've lost money, and that ignores the discounts and the import and shipping costs.
And somehow these players or phones physically move from Europe to end customer, also within this time window before the VAT is due.
Suppose that £458m was half phones and half chips, and the mobile phones costing 50 quid to buy wholesale, that means 4.5 million units. That's a hell of a lot of products, presumably they'd have to pay holding and storage costs on that.
So something doesn't seem quite right about these stories, also the frequency of them, and the sources, and I also read foreign newspapers and this seems to be a UK only problem, which is another warning sign that these aren't real.
So what am I missing?