Canada and UK Shut Down Carousel Scheme

June 15, 2017 Taxation in Canada

Carousel CanadaONTARIO – Tax investigators hope they have put an end to a CAD 50 million carousel scheme reaching from the UK to Canada.

The tax authorities of Canada and the UK have revealed that this week they carried out simultaneous raids on addresses associated with large-scale tax fraud across the two countries.

Accusations of fraud revolve around an alleged CAD 52 million in false tax refunds obtained by a group of 11 people based in the UK.

The fraud is understood to be a “carousel scheme”, which has become common in the EU and UK, but is still relatively rare.

The scheme involves a series of businesses, which purchase goods from each other, with some businesses in the chain claiming refunds on the GST paid on goods, without ever paying any GST themselves.

Often the goods are passed continually between each entity in the chain, forming the so-called ‘carousel’.

The raids were conducted in Ontario, and in London, Redditch, Birmingham, Stratford Upon Avon and Kenley areas of the UK.

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