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Too lazy to look for link but HMRC have tried to combat this by insisting that VAT on items like mobile phones cannot be reclaimed by the buyer and it has been challenged in court. Forget the details, but definitely sounds in the going after the sitting/law abiding targets category.
FFS, if Barclaycard, etc. can use some fuzzy logic systems to detect dubious transactions, surely HMRC could do the same. Otherwise does anybody have further details on the practical details of scam :-)
Company A is Vat Registered
Company B is not Vat Registered
Company A spends £30k on stock and pays VAT.
Company A then sells the stock to Company B for £10k and invoices for VAT.
Company B pays company A £11750
Company B then sells the stock for £50k
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