VAT SCAMS WITH USED CARS IMPORTED FROM THE UK

 Filenews 30 September 2020 - by  Theano Thiopoulou

Fraud involving imported cars from England is alleged to have set up English companies, involving as shareholders or directors persons of Cypriot origin, resulting in the United Kingdom losing millions in revenue from non-actual declared VAT. The phenomenon has taken on alarming proportions and that is why the United Kingdom Government has been asked to assist the Tax Authorities of Cyprus in solving the case.

Yesterday, the Tax Office informed the public that it must be particularly careful about acquiring used cars directly from the UK. It has been found that luxury cars are advertised on social networking pages (and elsewhere) at very attractive prices by companies in the UK and/or Cyprus and promises are made to deliver vehicles in Cyprus to private buyers.

The Tax Department, in cooperation with the relevant Departments in the United Kingdom, examines cases of companies that have made car deliveries to a large number of private buyers in Cyprus, for which there is a serious indication of avoidance of VAT payment in the United Kingdom (but also in Cyprus in some cases).

Invoices from the United Kingdom should specify in their description whether they relate to:

* Margin Cars: Invoices relating to margin cars, which indicate on the invoice the word "this is a margin car, no VAT has been claimed or will be reclaimed" (or similar word), and the price indicated is ONE and includes VAT (no division in value and VAT)

* Qualifying Cars: Invoices for cars that are not profit margin. VAT is normally levied in the United Kingdom and there is an analysis of VAT (value + VAT, total price).

On the basis of the above, private buyers are asked to be particularly careful about the invoice they receive for any purchase of a used car and not to accept invoices with incomplete data or ambiguities regarding the category (margin or qualifying) of the car.

The Communication stressed that there is a serious possibility that Cypriot buyers may find themselves involved in an investigation into the commission of criminal offences in Cyprus and/or the United Kingdom.

In practice, when someone buys a car over the internet from English companies involved in scams, the invoice is "blurred." That is, the buyer pays the total amount, for example 10,000 plus 2,000 VAT, and the invoice he receives indicates the total amount of 12,000. According to the data collected by 'F', the company in the United Kingdom has double invoices and deposits with the tax authorities another, with a smaller amount, resulting in the UK State losing revenue.