Britain to receive special VAT powers to fight carousel fraud

Britain is poised to levy special reverse charges on value added tax (VAT) for certain high-value electronic goods to fight carousel fraud. The European Commission has requested that the European Union (EU) Council of Ministers allow Britain to derogate from the EU’s Sixth VAT Directive so VAT-registered buyers would both pay and reclaim the tax from the government, rather than pay the tax to a supplier as under standard VAT. The products concerned include mobile telephones; computer chips/microprocessors/central processing units; electronic storage media for computers, mobile telephones or similar electronic devices; hand-held digital cameras and camcorders; digital audio players, such as MP3 players; digital video players and portable DVD players; wireless devices providing email, telephone, text messaging, web browsing and other wireless data access; hand-held computers; portable satellite navigation systems; and TV/computer games consoles. Tax evading suppliers of these goods have been disappearing after delivering supplies, leaving their customers with a reclaimable VAT receipt and customs collectors out of pocket.