- HMRC published guidance on fraud involving mini umbrella companies (MUCs)
- MUC fraud involves abuse of government incentives for small businesses
- Elphysic Ltd & Ors case revealed details about the scale and operation of MUC fraud
- UK directors for MUCs were recruited through social media and replaced by directors in the Philippines
- HMRC estimated tax loss from the scheme at £260m
- HMRC issued letters deregistering MUCs for VAT and denying them benefits
- FTT agreed with HMRC on certain aspects but could not prove MUC directors knew about fraudulent use of VAT registration
- HMRC decisions to deny benefits to MUCs were endorsed by FTT.
Source: taxscape.deloitte.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
