Sharp rise in UK exports prompts VAT fraud concerns

Figure show that exports from the UK to non-European countries were up sharply in June. The Office for National Statistics, however, has said that the official figures might have to be revised if it is found that they are inflated to VAT fraud.

As reported, official data shows a rise of 15 percent in UK exports to non-European Union countries between May and June. This dropped the goods trade deficit to £1.4 billion.

Exports of goods to Europe were also up, by 2 percent, but the trade deficit in goods sold to European countries actually grew slightly, to £2.8 billion in June from £2.7 billion in May.

The issue that is of concern to the ONS is the practice of some to reclaim VAT on small items of relatively high value such as computer chips or mobile phones, saying that the goods will be exported.

This “missing trader fraud”, as it is known, tends to artificially inflate data on exports. The ONS, along with Revenue and Customs, are currently investigating whether this sort of activity is going on within the European Union.

A spokesman for the ONS said that while that office does not know just yet exactly what is going on or how widespread the fraud might be, it was decided that it would be prudent to announce that the currently reported figures are not certain.