Thank you for sending us your comments on Panorama: Do you want to be a millionaire?
The debate is now closed but a selection of your views are published below.
Do you want to be a millionaire? was shown on BBC One on July 16 2006.
Timothy Holdstock, AbingdonNo one likes paying VAT, but we all have to. To find out some of it ends up with fraudsters is very fustrating. Why do they allow it to continue?
Mike Lake, HullLazlo Kovacs says it is impossible to monitor VAT rates for 25 different countries. The Railway Clearing House, before 1923, mamaged to monitor the traffic receipts of over 120 railway companies with traffic that flowed over more than one of them, and distribute the receipts, in the correct proportions. This was done with a staff of less than 200 and none of them had heard of a computer.
Sam, KentNow everyone knows how to commit the biggest and the easiest tax crime. I am sure the numbers will now rapidly rise.
K G Brewer, MaidenheadEnjoyed the film (made me angry). But surely France, Germany & Italy have a similar problem? How much revenue are they losing? How are they dealing with the problem? The problem with tax harmonisation is related to taxes being used for two purposes - raising revenue & MANIPULATING THE ECONOMY!
Paul Armstrong, UKVAT is an unpoliceable stealth tax. Vast sums go round in circles with the consumer paying the ultimate burden. Court cases on VAT on chocolate biscuits for example? Taxes need to be simple and open.
Sam, UKThe recent panorama report in VAT fraud in the UK was a good attempt at addressing the VAT issue - however, I think the point was missed in great detail.
Yes, the way the fraud is commited was represented accurately, however the panorama report should have included more balanced arguments on how this government has actively allowed this fraud to continue...
what the report failed to show was how legitimate traders of high value goods are struggling to survive within the industry trade. How institutions like the FTI are helping to solve the issues without much help from Customs. How trade is being encouraged to be limited by the influence of HMRC by putting pressure on banks to close accounts from companies that recieved net repayments of VAT.
Its beautiful to see how a few indivduals have benefited from this system, but a true report would have shown a more global understanding to the industry and the problems that is faces too...
These views are clearly not few and far between but a constant battle that legitamate traders have to deal with day in and day out in order to exist within a trade that is partly tarnished, but that also contributes a herrendous amount of revenue towards this governments treasury too.
Concerned Civil Servant, West MidlandsI have to say that the programme went some way to explaining to the public at large what HMRC (Revenue & Customs) are up against with regard to fraud. However having read some of the comments made I can see that some people still think that stopping the fraud is an easy thing to do. Can someone tell me why Customs are the bad guys here and not the disgraceful excuses for human beings like Ray Wooley who feel it is their right to take what they want with no regard to the rest of us. To say that Customs isn't trying hard enough is ridiculous, after all Customs staff are taxpayers too.
There is no targeting of innocent people. Unfortunately sometimes innocent legitimate traders get caught up in the departments attempts to stop fraud. Due to people like Mr Wooley everyone has to be subject to more stringent checking which isn't easy to do when constantly faced with job cuts, the fatally flawed system we all have to abide by and the abusive people who question the departments need for information. The gentleman who thinks that HMRC hand out numbers to anyone needs to reassess his opinion. It is harder to get a VAT number now than it has ever been. He can check that with any number of firms of accountants. If anyone has information regarding fraudlent companies they should contact the Customs Confidential number given above and help combat the fraud.
Mike Frost, BristolWith VAT could it not be made that the buyer of the goods in UK sends the net price to the seller and the VAT and the sellers VAT number to HMRC. This would stop this con stone dead. Could be set so that only total sales over a certain value need to follow this procedure.
Matthew Larsen, UKCongratulations on your show 'Do you want to be a millionaire'! I thought it was excellent you found the guy and got him in an interview! What an idiot. Excellent journalism, would like to see more of this type in the future!
Jason Lomax, SkelmersdaleLots of questions on here about how carousel fraud can be started and perpetuated. Dead easy, you need no capital at all, the whole point is that the money flows backwards while the 'goods' move forwards. Goods are traded like commodities, and they never end up being used by Joe Public in the street.
Hugely annoyed and disappointed with the program. I have an active interest and was so frustrated at how ridiculously comical it was put across. Pity it didn't focus on the real issue with this fraud; organised gangland crime is whats at work here. Its far more serious than what the reporter was stupidly treating us to. Come on BBC you can do better than that.
The main thing that viewers weren't treated to was the fact that, presently, the VAT system is being used to launder money at a frightening rate, which is a really worrying thing. I'm in finance at see it every day. The country's being bled dry. For every single sale that takes place, loads of money gets paid out of the supply chains to offshore banks around the world, and it gets filtered through to all manner of things, including funding terrorism.
You can't blame C&E either, the Vat legislation means their hands are practically tied. Everyone petition your MP to get the VAT system changed and the HMR&C powers strengthened, we're all suffering because of these people.
CC, UKI would just like to say after watching Panorama on Sunday night regarding Missing Trader Fraud that I am shocked and very disappointed that you felt the need to mention two products, Mobile phones and CPUs.
The problem is without doubt the vat system and not Mobile phones and CPUs.
Your program was inaccurate and misleading, the type of scam you showed is too old but still very possible with other products, but not with Mobile phones and CPUs.
Before we pay any company One Million pounds or One pound we notify HMRC of who we are paying, otherwise we could be held liable under the joint & Several Liability rule for any money that goes missing if our supplier or his supplier become a missing trader.
We spend as much time verifying suppliers and talking to HMRC as we do buying and selling stock, as do most of the major companies we trade with.
You mentioned nothing about company¿s identities being cloned or stock, which is known as phantom goods¿goods which have been exported but did not exist in the first place.
I feel the only good your program did was to show the public how to commit fraud on a major scale¿
This weeks Panorama did show how our government is being robbed of millions of pounds, next weeks panorama shows how our government is taking millions from it people.
Graham Evans, SouthamptonI for one will write to my MP, we must go for origin payee. Any reaction talking about leaving the EC is unfortunate, the problem is the way we are behaving as a member. What is wrong with common VAT when doing international trade, or even a common currency? If you want sovereignty just add local sales tax instead of rates or even give it all back if you wanted to. The programme, though a good subject did seem to be a bit dumbed down Time we woke up to the fact that since we no longer have an empire we have to earn our living, mostly buying and selling goods and services abroad.
F Rogers, UKExcellent program - very irksome to think Ray Wolley is spending my money on the riviera, when the NHS is in such trouble. Surely to God there is a way of preventing this fraud?
C. Constantinou, LondonI am a director of a company, which trades in mobile phones and computer components.
I have been in this industry for six years, and I believe that one of the main reasons that we have this huge problem in our industry is because of the pathetic way customs dish out Vat numbers in the first place.
Vat numbers are give out to almost anyone who applies for them, people who have not even been in the UK for too long...people who lie as to why they need a vat number, for example they are going to form a shoe business or a furniture business, a food shop or something, and once they have a vat number they become mobile phone traders and HMRC do nothing about it.
We are approached almost every day by companies who have been formed for just weeks, with vat numbers and ready to trade as phone companies
To combat Missing Trader Fraud, HMRC formed a vat office at Redhill and the purpose of this office was to check supply chains, for example, when I am offered goods from a supplier, I inform by fax HMRC at Redhill that I intend to buy the goods, given customs all the suppliers company details, and also informing customs at which warehouse the goods are held, before we make any payments to the supplier
Then customs are supposed to ring my supplier and ask him from which company he is buying the goods from and so on and if there is a suspicious company in the supply chain customs should be able to identify it.
If the supply chain is ok we will then continue with the deal, but most of the time HMRC do not check the supply line and do not respond to our fax.
As a director I go to great lengths and expense to protect my company and to make sure we buy from good reliable companies.
1. We try and verify suppliers and buyers with customs at Redhill 2. We perform a search on companies and directors. 3. Then we ask a firm of ex-customs officers to visit the office of buyers and suppliers. 4. And we only trade with companies who have filed accounts at company¿s house.
All the above checks are not required by law, however for our own protection this is how we trade.
While Customs continue to hand Vat numbers to just about anyone and the policing of this industry is left to companies like ours.
Chris Gibbs, North WalesIf they put a law into place to insist on all serial numbers pertaining to mobile phones and compuer chips (imei numbers) the hmrc would not be in this prediciment.
Simon Thompson, PurfleetYour program, its producers and your idiotic presenter should be investigating the real crime of how the British people are heavily taxed whether they are spending, earning or just breathing to fund ridiculous foreign wars and government waste and inneficiency. You may also try contacting your local VAT office to get clarification or an explanation of several pertinant questions regarding VAT. You will not receive any help or assistance because they don't understand the system any more than businesses do. Please grow up and try living in the real world. Kind Regards.
Saranjit Dosanjh, BrusselsPersonally speaking, despite Panorama's repeated reference to "tax payers money", I couldn't care less if Ray spends the rest of his life in Switzerland at our expense - this type of program only diverts attention from the real tax dodgers.
David Monteith-Hodge, Alyth, ScotlandA simple change that might make the fraud harder AND retain local control over VAT rates might be to make VAT payable at the rate in force in the country of the purchaser, to the VAT authority in the country of origin. The reconciliation of the differences in the amounts between countries would actually be quite an easy task and would shift the occurence of the fraud to the originating country if VAT is not paid to the treasury of that country. Enforcement would thus be easier and require fewer resources as the offence would be by a national of the country in which the offence of non-payment were committed. Just a thought.
Mr Kite, ScotlandI considered the programme broadcast tonight 16th July, 2006 worthwhile and adds to a belief I have that the system of VAT collection must be radically improved.
Christopher Riches, Highland, ScotlandThanks must go to Justin Rowlatt and all the staff of Panorama for the hard work and determination to expose the roots of Carousel fraud.It made me angry at the incompetence and intransigence of our Government and others who will not harmonise VAT throughout the EU.I hope it causes such a public outrage that it brings this Government, and other incompetent ones in the EU to face stark realities.How do we not know that that money is not already funding terrorist activities?
Dawn Litlekalsoy, AberdeenI hope that Mr woolley and others like him are brought to justice and the money which is recovered is used for the benefit of those who need it most .. seeing tonights programme followed by a trailer for next weeks documentary which follows on from a previous programme about pensioners having to sell up in order to afford their own care ..!! need i say more.
Christopher, CranbrookI don't know about the rest of those who saw Panorama, but I am horrified. There is clearly only one way to deal with this: harmonise VAT. If the EU cannot deal with relatively preventable fraud of this scale what good is it to its citizens?
Walter Crawford, United KingdomAn excellent exposure of the fact that we have a criminal culture where the ordinary "Joe Bloggs" is ripped of daily - pays for everything and the government watchdogs are unable or unwilling to take the appropriate action to catch these villians.
Simon Cole, LondonTonight's Panorama was a fine example of what we pay our licence fee for. Good investigative journalism, presented in an approachable way.
Simon Cooke, SkiptonHave just watched the prog on VAT fraud. This is just another example of the wastage by the BBC of the TV tax. Why does the BBC require £2.3 billion? So that you can pay Jonathan Ross £600k? Next, HM Treasury collected £420 Billion pounds in 2005. I will never be convinced that Britain needs this much to be run efficiently. Please devote future programmes to informing the public as to why there is a need to collect £420 billion & spend £520 billion. Compared to that, the sums involved in the VAT fraud are a pittance.
Edward Satterthwaite, UKThe real unspoken problem that leads to VAT fraud is the preposterous level of tax that is imposed on the average earning UK tax payer. It is so ridiculous that it surprises me that there is not rioting on the streets.
Tony Munro, Thames Ditton, SurreyWhen we buy goods we pay the VAT to the Seller and then as your programme pointed out many sellers (traders) then go "missing". Would it be possible for the VAT to be paid directly to C&E therefore depriving the seller of the opportunity to vanish?
Subodh Mody, LeicesThe only people who can commit the fraud are people who are VAT registered. The VAT people have payment profile of all the businesses who have dealt with it over number of years. Any significant change in the VAT returns should show up on their system as alarm signal. Most of the people who are registered for VAT do not export/import goods. So they have to concentrate on people who do. H M Customs & Excise have to change the rule of paying out VAT. Instead of automatically paying out on receiving the VAT return especially to export/import businesses they should devise a system with say banks and the money would be in some firm's account but only cleared by the banks by doing proper checks. This way H M Customs & Excise might have to pay out smaller amount (as part of service provided by the bank) than the one they are loosing at present. I personally think the fraudsters are not only getting away with VAT but also tax from Inland Revenue.
Kuno Genoni, BeckenhamIf we made tax much simpler, it stands to reason that there should be less tax fraud. If tax was no more than 10% and chargeable all transactions then each EU government would have 10% of all trade. If that is not enough to run a country there must be something wrong with the effectiveness of the government¿s processes.
10% is in line with the old Christian tithe, in line with Judaic systems and Islamic Zakarak. EU Governments are obviously the cause of their own problems. It would be better for governments to try to take less and to promote greater charity amongst their populations.
Michael Davis, EnglandI watched your programme about VAT fraud tonight. I think you should have brought out that our previous system (purchase tax) was very difficult to defraud & the penalty was draconian. When Customs found fraud, they could de-register the company involved, effectively putting them out of business. No need for expensive & uncertain court cases. But of course, we had to abandon our much better, simpler system as a pre-requisite to joining the EEC (as it was then). Also, because very few firms were able to be registered - everyone else just had to pay it - Customs could keep a very close eye on them, visiting at least once a month. This made the potential of being caught very high, so fraud was virtually unknown. So, another fine mess we can blame on the EU!
Ted Watson, BrightonVery disappointed with this program. HMRC are currently suffering 12,500 jobs cut under the government's Gershon review, and the 4,250 jobs being relocated out of the south-east where much of the carousel fraud is committed. The report of 1000 extra staff is fictitious because the staff are taken from other frontline areas which could prevent the fraud in the first place. Customs & Excise has suffered decades of cuts and "rationalisation". This has led to fewer officers visiting potential fraudsters, fewer officers checking imports and exports. All this information was available - Observer articles, Guardian letters from Union.
Mr Vinnie Chadha, ManchesterBeing in legitimate businessman in the computer components distribution business since 1997 I have come across many VAT fraudsters or people/companies that are knowlingly linked to missing traders. In the last 12 months VAT fraud has increased so much on mainly HDD, CPU and TFT monitors that I can lo longer compete or make any profit selling these goods unless I start buying VAT fraud stock which I would never knowingly do and even if I did the VAT fraud market is so big that is has taken over the normal legitimate market becoming just as competitive.
I feel the UK government is letting this country down in a big way, we are not just losing VAT money. There are also many other opportunity costs as a consequence of VAT fraud for example:- honest busnesses having to close down as they cannot compete therefore making huge numbers of staff redundant, causing great unstablility in the whole of the IT industry as pricing does not follow normal supply and demand rules.
I really feel the customs need to employ at least 10000 staff and also need to look at employing people from within the industries that are affected, also advertise in all IT magazines to target VAT fraud just as they do target benefit fraudsters.
Stephen Lea Sullivan, Antipolocity, PhilippinesCountries dont like to be told how to run their finances because it is unpopular with their voters. If they are seen to give up this right, They are seen as giving up sovereignty.But the comisioner could bring out a treaty called Request Respect. Whereby he could ask the countries to do some thing like harmonise vat but they would not be under any pressure to do so.Like asking for a favour. this would mean that countries presidents would not lose face. The voters not lose respect and the countries who comply could join the country of origin for vat and stop the fraud. Then others would probably follow.
Jimmy Barrie, AberdeenUtterly unbeleivable !! This guy "walks out" of prison !!flies to another country where he can enjoy his illgotten gains.Then he even appears on TV to brag about how easy it was !Meanwhile some legal busineses have to close plunging the poor TAX PAYING workers and their families on to the dole and all the suffering that they have to endure.Who says 2CRIME DOESN'T PAY" ?
Robin Dunn, LondonI found this programme fascinating and disturbing. Most particularly the apparent inability of EU nation states to come up with possible solutions to close this criminal loop-hole. I may rather too simple about this but two (rather obvious) possible solutions present themselves:-
1) As suggested in the programme VAT should be charged at source - i.e. the initial exporting country. However as there is problem re differing rates and no agreement to commonality the VAT c/should be charged at the rate of the receiving country. Thus if country 'A''s VAT rate is say 25% but the country to which the goods are to be exported is 17.5% the VAT would be charged at 17.5%. The logic of this, is that if the goods are exported at zero VAT and then sold in the receiving country then the local VAT rate would apply - in this example 17.5%. If necessary, the VAT collected in the exporting country could be passed to the receiving country if this would help facilitate diplomacy - after all that is were the VAT would end up if ultimately or initially sold within that country. The reverse could also work were the VAT is lower in the exporting country and higher in the receiving.
2) A variation on this would be to charge at the local rate - in the case above at 25% - which is passed to the receiving country and the exporting company applies in the receiving country for the difference i.e. in this case the difference between 25% and 17.5% - 7.5%. The added benefit of this is placing the onus on three critical bodies to follow the rules - the company, the exporting country and the receiving country with the concomitant tightening of controls.
I am sure that there are numerous variations on these themes but with a good systems approach this fraud could be minimised.
Andrew Pike, SloughWhat an amazing display of how our country is going to the dogs. I am amazed at how HMRC can justify effectively shutting down a legitimate business because VAT fraud amongst it's supply chain. I hope that someone is doing something about this. I fail to see why Justin Rowlatt resorted to immature and unprofessional conduct while interviewing Ray Woolley. I understand that Ray Woolley is a convicted VAT fraudster, and was arguing an unlikely corner by saying he is actually innocent but there is no excuse for that sort of treatment in an interview. If this is jornalism at all, it is in its poorest form.
Ash, LutonI am sure they can plug the loophole so why haven't they?
Clive, BirminghamDon't you think that now you have shown people how to scam the VAT man they will all try to do it?
P Spaul, LondonThis fraud could be ended today if all the European countries agreed to harmonise VAT rates. Politicians don't want to do this for political reasons, and would rather give billions to fraudsters every year.
Rob Allan, EdinburghHighly incicive, very informative, and highest standards of accuracy, and extremely well executed - well done Panorama !
Richard Peperell, MarlowI am appauled that this scam has been known about for so long and yet little has been done to control it - 1000 offices sounds pitiful compared to the magnitude of the problem. Possible solution could be to change EU law so that VAT is changed by the exporting country but at a rate of reciving country. The exporting country can pocket the difference where VAT rates differ!
James Card, UKwhere did Ray Wooley a pipe-layer get his capital.If he bought from companies abroad they would have wanted monies to be paid up front before deliveries.Banks would not have lent him without years of signed off accounts. You also intimated that he sold the goods in large quantities to companies in this country.Surely these legitimate companies knew that they could buy from abroad without V.A.T. and only pay this once the good had been sold thus conserving their capital.
David Deacon, DartfordThis was a fascinating film. I found it hard to believe that the whole thing was quite so easy , and that , despite the apparent damage this fraud was doing , customs and excise were doing so little to deal with this fraud.
Con Loveday, WolverhamptonAs a general principle why do HM R&C not ask for proof of vat payment, by sight of the original invoice before they refund vat.This may be an oversimplification but I'm sure the elements are there.Extra staff may be required but there's a lot to go at.The programme suggested an air of resignation about recovering my money-NOT GOOD ENOUGH.
Sally Grey, LondonIs it possible to explain to me why Mr Wooley, for example, was given an open (and not closed) prison sentence in the first place? It beggers my belief that this was the case far more than he got away with it in the first place. Also, I'd like to know if there's anything the public can do to try and prevent this from happening in the future? Any MP's we can lobby? It's annoying that we are so powerless and it seems to me that if there's nothing we can do, then your programme was pointless. In fact, it's likely that all you've achieved is to make would be criminals more aware of the potential to make millions.
Steven, berkshireWhat is really ridiculous is that these fraduseter are allowed to escape so easily.
VAT fraud can be solved by allowing VAT Free movmenet of goods among registereed traders and amke VAT a national tax rather than an EU tax which complicate matters.
Charlie, Leamington SpaAn extraordinary business. It is always difficult to explain the way these scams work without seeming to give us all instructions on how to make millions illegally. But it would nevertheless have been good to have more of the explanations and less of the frankly embarrassing visual gimmicks: so the guy could afford a Ferrari. Fine - we don't need to see the reporter driving one. In fact, we don't need to see the reporter at all.
D Shackle, FolkestoneThis just makes my blood boil. Why should I as an ordinary tax paying citizen be bothered to actually PAY MY TAX just for someone else to steal. This MUST be stopped immediatly. In a time when this govenment is forcing people to sell their hard earned homes to recieve the care they need in their later years it is disgusting they sit back and do nothing to prevent these thugs from stealing not just millions but BILLIONS of pounds of our money. Lets get out of europe now before the crooks of this world bancrupt our country.
Brian Cohen, Guildfordgod programme etc- however, the basic scheme was not at all well explained- eg how did a pipe fitter of relatively low income acquire the £1m mentioned to make purchase of first lot of phones? Also when sold-(I operate the VAT rules, have done for 25 years, I know them backwards, forwards etc etc-) when a sale is made, a corresponding income has to be shown in bank account-- which includes the VAT- I underatand that in the cases you mentioned this VAT was collected, but not remitted- if the sale was effectively made to the fraudster themselves, (so they could re-import thr same items), then how was this fraudulent VAT raised? ie where did the money come from? Seems to me there is a missing eleemnt in the story somewhere- maybe witheld from programme to avoid others duplicating this crime, but although it is a very serious issue, we all suffer, the programme did not really make a good case for how it works. It left me thinking if there was in fact a crime at all- Solution to it all- abolish VAT altogether, and replace it with an end user sales tax only- which with VAT, paying it, reclaiming etc it amounts to that anyway- but by having only a sales tax at the end user , all fraud is elimated at a stroke, because no trader input/output tax is collected, claimed processed etc. Simple. Not foolproof, but limits fraud to one area only.
Neil Clegg, Burnleythe VAT fraud was an interesting story, but the treatment was childish and "dumb", let's have the old serious style back please.
Helen, AylesburyI was horrified that your presenter thought he could drive and turn and talk at a camera at the same time. I suggest a chauffeur next time.