Tayside and Central Scotland

Details of Dundee man's alleged multimillion tax scam

The trial of a man from Dundee at the High Court in Edinburgh has been hearing details of a scam used to siphon off millions of pounds in VAT.

Businessman Shahid Ramzan, 40, is charged under the Proceeds of Crime Act of illegally transferring almost £115m from Scotland.

He accused of using a scheme where goods are sold with VAT charged but not paid and then the VAT is claimed back.

Mr Razman denies the charge and another of failing to pay £6m in VAT.

At the second day of the trial at the High Court in Edinburgh, Roderick Stone of HMRC explained how such a scheme worked.

He said the trick is that an importer sells on goods charging VAT but not actually paying it. Eventually the goods, after passing though the hands of several companies are exported again.

'Carousel fraud'

The exporter then claims back, and receives, a VAT refund from what appears to be a genuine transaction, but because the refunded VAT hasn't been handed over in the first place, HMRC makes a loss.

Mr Stone said because the same commodities can go round and round from importer to export broker and back again, the scam is known as a carousel fraud.

Mr Razman denies a charge brought under the Proceeds of Crime Act alleging that he took steps to hide, transfer or remove from Scotland a total of almost £115m gained through such frauds, also known as missing trader intra community fraud.

He is also accused of cheating the tax man out of about £6m of VAT between October 2002 and July 2004, which he also denies.

Jayne Ramzan, 40, from Dundee, also faces one of the charges, said to involve £3.2m, which she denies.

Shahis Ramzan is accused of using a network of companies linked to Cortachy Wholesales Limited trading in computer parts, mobile phones and accessories.

Mr Stone told the jury that traders operating MTIC scams preferred to deal in low volume, high value goods. Computer chips and mobile phones were a favourite in 2004, he said.

The trial before Lord Brailsford is expected to last around three months.

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