400 VAT men invade Stoke

A team of 400 Customs & Excise investigators is scouring the Stoke-on-Trent area in a desperate attempt to stop the spiralling rise in VAT losses to the taxpayer.

Customs has admitted that VAT scams, mostly involving mobile phones, are now a bigger problem than alcohol and tobacco smuggling. It says the frauds cost £2.75bn a year – though the true cost could be up to £10bn.

After a Stoke man was sentenced to five years in prison for a £3.2m VAT fraud, Customs spokesman Mark Powell said: "Stoke is the centre of Britain's mobile phone fraud. We believe it was former employees of a company in Stoke who first realised that mobile phones could be used as an effective device for VAT fraud."

In recent months there has been a wave of raids and arrests in the Stoke area by Customs officers. These have re- lated to VAT frauds which exploit the fact that mobiles imported from the European Union are VAT-exempt. Fraudu- lent traders levy the duty when selling on and then disappear without paying Customs.

Craig Jones, 32, a former soldier who served in Northern Ireland, was found guilty last week after a five-day trial. Examination of invoices showed that Jones's company, Hallberg, had sold more than £19m worth of mobiles which should have resulted in a VAT payment of at least £3.32m – in contrast to the £5,221 declared by the company.