In the first part of this article, published on 1 June, the decision of the European Court of Justice (ECJ) in Optigen and Others [2006] was considered. A few months after this, a second VAT case – Commissioners of Customs and Excise and HM Attorney General v Federation of Technological Industries and 53 Others – was heard by the ECJ. The decision in this case will also have a significant impact on attempts by HM Revenue & Customs to slow or reverse losses to the revenue from carousel fraud.
In the Finance Bill 2003, the Government introduced two new measures intended “to tackle serious cases of VAT evasion and revenue losses from Missing Trader Intra-Community (MTIC) fraud”. The new measures, applicable only to traders in telephones and computers (including parts and accessories) and software, were enacted as Sections 17 and 18 of the Act and introduced a ‘security provision’ (Section 17) and a ‘joint and several liability’ provision (Section 18) into the VAT Act 1994 (by amending paragraph four of Schedule 11 and introducing Section 77A respectively); both came into force on 10 April, 2003.
