Tax rises or government spending cuts looked a growing possibility yesterday after official figures estimated that so-called "carousel" fraud activity had jumped another 50% in the second quarter of the year, reports the Guardian.
The paper says the Office for National Statistics, the government statistician, estimated that there had been nearly £10bn of criminal activity aimed at fraudulently reclaiming VAT from HM Revenue & Customs. That was up from £6.5bn in the first quarter and four times the estimate for the same period last year. The amount of VAT actually lost to fraud was unclear. Figures for 2005 will not be released until Gordon Brown's pre-budget report at the end of the year. But for 2004, the latest year for which figures are available, the government has calculated VAT theft was £1.1bn-£1.9bn, on est...
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