HM Revenue and Customs have revealed that VAT fraud has reached a record level in the UK.
Up to £7.4 billion of UK trade has been attributed to VAT fraud in the last trade quarter.
Fraudsters import goods from Europe tax-free and sell them with VAT.
But then they disappear without returning the tax to the Treasury, effectively to taxpayers.
Panorama has investigated VAT fraud for three months and tracked down one of Britain's biggest VAT fraudsters.
Justin Rowlatt meets 'Riviera' Ray Woolley who escaped from an open prison after booking himself a taxi when he was told to pay back nearly £10 million to the government.
Ray Woolley, who had worked as a pipe welder near Stoke-on-Trent, was convicted of £38 million of VAT fraud.
Panorama finds out how easy it is to commit this fraud and how easy it is to get away with it.
Justin discovers that the most profitable form of VAT crime is so-called 'carousel fraud' where the same goods, usually mobile phones or computer chips, are repeatedly imported and exported.
Panorama also interviews Mike Cheetham, a legitimate businessman whose company was trading up to one million pounds a day.
But it closed overnight when he found out that he had VAT fraudsters in his supply chain and that he was going to lose millions of pounds of VAT repayments.
HM Revenue and Customs have 1,000 officers dedicated to tackling VAT fraud.
Panorama: Do you want to be a millionaire? was on BBC One on July 16 2006.