HM Revenue & Customs (HMRC) officers investigating a £38 million suspected VAT fraud swooped in early morning raids today. The suspected fraud involved the trading of emissions allowances (often called ‘carbon credits’). Seven people were arrested in the Gravesend and Greater London areas and twenty seven properties, both business and residential, were searched. Further arrests are likely and the investigation continues.
Those arrested are believed to be part of an organised crime group operating a network of companies trading large volumes of high-value carbon credits.
The fraudulent companies purchase carbon credits from overseas VAT free sources and then sell them on to businesses in the UK at a VAT inclusive price. The VAT charged by the fraudulent companies is never paid to HMRC.
It is thought that the proceeds of this crime have then been used to finance lavish life styles and the purchase of prestige vehicles.
Les Beaumont, Deputy Director of Criminal Investigation for HM Revenue & Customs (HMRC) said:
“HMRC investigates all criminal attacks on the tax system, halting theft of revenue, gathering evidence and supporting prosecutors in bringing offenders before the courts.
“We always aim to recover the proceeds of crime, restoring that money to the public purse where it belongs. That is our intention in this and all similar cases.