There has been great excitement over the theft of £40 million-worth of jewellery from a Mayfair shop – and rather less at the arrest of seven people for an alleged fraud involving false VAT claims of £38 million on buying and selling carbon credits. This racket, whereby people buy carbon credits from abroad, free of VAT, then claim the VAT they haven’t paid from the Treasury, is now said to be worth hundreds of millions of pounds a year.
Until recently this type of “carousel fraud” was centred on electronic equipment, such as mobile phones, and EU-wide was estimated to have netted some £10 billion. The European Commission said it was powerless to act, but since various national authorities found ways to clamp down on that scam, the crooks have learned to work the same racket on the fast-burgeoning worldwide market in buying and selling the right to emit CO2.
What is not generally appreciated about these VAT frauds is that they involve real money, handed over to the crooks by the tax authorities. At least with a theft of gems, the only losers are the policy holders of an insurance company. On VAT, however, we all pay.
It seems wondrously apt that two absurd systems cooked up by the EU – one being VAT, the other an “emissions trading system” designed to save the planet from non-existent global warming – are being exploited together, to rob us all of hundreds of millions of pounds a year.