Missing trader or carousel fraud cost Her Majesty's Revenue and Customs £3bn in the last financial year.
Figures from the Treasury reveal the size of the problem, although HMRC believes it is getting on top of the problem - helped by the closure of the First Bank of Curacao earlier this year.
Customs estimates that attempted MTIC fraud was between £3.5bn and £4.75bn. But many of these are stopped so Customs believes the true cost is more likely to be between £2bn and £3bn.
A major victory was achieved in September with the closure of the First Curacao International Bank (FCIB). Every single UK convicted missing trader fraudster had an account at the bank.
Computer chips and mobile phones are often targetted in the fraud because of their high price and small size.
Carousel fraud involves importing, or claiming to import, goods from another EU country without paying VAT, then selling them on and pocketing the tax. The same goods will often go from country to country earning fraudulent tax at every stage.
Increasingly, the goods don't even physically move.
The European Commission has agreed to change the way VAT is paid on certain goods.®