MTIC VAT Fraud: What a Freight Forwarder Should Do After an Interview Under Caution?

What Should I Do After an HMRC Interview Under Caution?

If you have already been interviewed, establish what HMRC is investigating and whether further questions or document requests are expected. 

An interview under caution is a formal part of a criminal investigation. Volunteer further information, or hand over documents, until you have spoken to a solicitor experienced in MTIC VAT fraud investigations.

Everything you say or provide from this point forward can be used as evidence, and an unadvised response can narrow your options significantly.

Preserve every record you hold

Secure all physical and digital transport records immediately. That includes CMR consignment notes, delivery notes, weighbridge tickets, vehicle GPS and tracking logs, driver tachograph records, customer booking confirmations, and any cross-border movement documents. 

Do not alter, delete, or reorder any document, even if certain records appear inconsistent with others. Alteration of documents creates a separate criminal risk that is entirely avoidable.

Where records exist in other languages, retain the originals alongside any translations. 

Both versions may be needed as evidence in proceedings, and a translation that does not accurately reflect the original can itself become a point of dispute. 

Note which loads HMRC has identified as disputed and which of your records correspond to each.

Check deadlines and pending HMRC correspondence

Review any letters or notices HMRC has sent and identify the response deadlines.

A formal request for documents may carry legal obligations that differ from an informal enquiry.

If HMRC has requested a further interview under caution, speak to a solicitor before attending.

Your solicitor can review the earlier interview, explain the questions HMRC is pursuing and advise how to respond.

Why acting quickly matters

Some transport evidence may only be available for a limited period. Third-party tracking providers, foreign consignors, consignees, and weighbridge operators do not retain records indefinitely. 

The sooner a solicitor is instructed, the sooner steps can be taken to identify and preserve records held by others before they are overwritten or purged.

Prompt instruction also allows a solicitor to advise on whether a voluntary disclosure or a no-comment interview is more appropriate on the specific facts. 

A solicitor can also assess whether civil and criminal proceedings are running in parallel, and begin gathering independent evidence that the goods movements were genuine. 

These are decisions that benefit from legal advice before they are made, not after.

Can a Haulier or Freight Forwarder Be Prosecuted for MTIC VAT Fraud?

A haulier or freight forwarder can be prosecuted in connection with MTIC VAT fraud, but conviction requires proof of specific criminal intent.

Moving goods as instructed is not, by itself, a crime. However, carrying goods that were part of a fraudulent trading chain does not, by itself, establish criminal liability.

The prosecution must prove the elements of the offence charged, including the necessary knowledge or dishonest involvement.

How logistics operators have been drawn into prosecutions

MTIC VAT fraud involves trading arrangements designed to obtain fraudulent VAT repayments or avoid paying VAT owed to HMRC.

In some schemes, transport records are used to give apparent legitimacy to transactions involving goods that never moved or did not exist.

A logistics operator may face investigation where HMRC believes they knowingly supplied false delivery records, arranged fictitious movements or assisted a fraudulent trading arrangement.

However, the fact that your firm transported goods for a business later linked to fraud does not mean you knew about its activities.

Investigators must distinguish legitimate haulage work from knowing participation in the scheme.

What the prosecution must prove

Under the Value Added Tax Act 1994, a person may commit an offence if they are knowingly concerned in fraudulent VAT evasion or steps taken towards it.

This can include someone assisting another person’s VAT fraud, even if they were not responsible for organising the scheme. The requirement for knowledge is important.

Recklessness alone is not sufficient for this offence. However, deliberately avoiding information about wrongdoing may, depending on the evidence, support a finding that a person had the necessary knowledge.

For example, ordinary transport instructions are different from knowingly creating false delivery records for goods that were never carried.

If you genuinely did not know that the transactions were connected to VAT fraud, that may be central to your defence.

Alternative charges used in serious MTIC VAT fraud cases

Complex carousel fraud is often prosecuted as conspiracy to defraud at common law or as cheating the public revenue. Both are indictable-only offences. 

Conspiracy to defraud carries a maximum sentence of 10 years’ imprisonment, an unlimited fine, or both. Cheating the public revenue carries no statutory maximum sentence.

The charge selected depends on the alleged level of involvement and the complexity of the scheme. 

A solicitor will advise which charge is most likely to apply on the facts of your case and what that means for how the defence should be approached.

What Does HMRC Mean When It Says I Facilitated VAT Fraud?

HMRC uses the word “facilitator” to describe a person who, while not the main missing trader, allegedly took deliberate and dishonest action that made the fraud possible. 

In an MTIC VAT fraud context, that might mean providing transport services with knowledge that those services were part of a contrived supply chain designed to generate false VAT claims.

The legal meaning of facilitation

The prosecution must identify the offence and show how your conduct satisfies its legal requirements. For example, knowingly issuing false transport documents to support fraudulent VAT claims may create criminal exposure.

Simply carrying goods under ordinary commercial instructions is different.

The fact that your company appears in a suspicious supply chain does not establish that you knew about or agreed to any fraud.

Facilitator versus innocent participant: where the distinction lies

Your involvement may have been limited to collecting goods, transporting them and obtaining delivery confirmation.

HMRC may nevertheless examine whether you were aware of unusual arrangements, such as repeated circular movements, unexplained payment instructions or discrepancies in customer information.

These circumstances may raise questions, but they do not automatically prove knowing involvement.

Evidence showing that you accepted genuine bookings, followed normal procedures and received ordinary commercial payments may help explain your position.

The distinction is between what happened within the trading chain and what you actually knew about it.

Why the civil test does not equal criminal guilt

HMRC may also use the Kittel principle to deny input VAT where a trader knew or should have known that a transaction was connected to fraud. This is a civil tax test, assessed on the balance of probabilities.

Criminal liability requires proof beyond reasonable doubt and depends on the particular offence charged. For fraudulent VAT evasion, the prosecution must establish knowing involvement.

A civil decision against a business does not automatically mean that its directors or employees are criminally guilty.

The two procedures should be assessed separately, particularly where both arise from the same disputed transactions.

Which Transport Records Can Help Show That the Goods Really Moved?

Transport records may help establish whether disputed loads existed, where they travelled and who received them. The strongest evidence is often a combination of documents and independently generated records that support the same journey.

CMR consignment notes

CMR consignment notes are commonly used for international road transport. They record details including the consignor, consignee, goods, collection and delivery arrangements.

Signed copies may help confirm that a load was collected and delivered.

However, a CMR note should be considered alongside other evidence. Its existence alone does not establish that every detail is accurate or that the transaction was legitimate.

Where dates, addresses or weights differ from other records, those discrepancies should be examined rather than ignored.

Weighbridge tickets and load records

Weighbridge tickets may record a vehicle’s weight, location and the time it was weighed. They can help establish whether a vehicle was carrying a load during a particular journey.

Compare the recorded weights and times with the corresponding collection and delivery documents.

If tickets are missing, the weighbridge operator may hold electronic records or other information confirming the vehicle’s attendance.

Vehicle tracking and tachograph data

GPS and tachograph records can help establish where a vehicle travelled, how long the journey took and when stops occurred.

This evidence can be particularly useful where HMRC disputes whether goods were physically transported.

However, vehicle movement alone does not prove what goods were carried or what the driver knew about the transaction.

Preserve the original electronic data wherever possible, rather than relying only on summary reports.

Customer bookings and communications

Booking confirmations, emails, messages and delivery instructions may explain how your firm became involved. They can show who arranged the job, what services you agreed to provide and whether the instructions appeared consistent with normal haulage work.

Payment records may also help establish the commercial arrangements. Where overseas customers were involved, retain the original correspondence and any available translations.

These records may be relevant to both the legitimacy of the transport work and your knowledge of the wider transaction.

Dealing with missing or inconsistent records

Missing documents do not automatically prove wrongdoing. Older CMR notes may be unavailable, and tracking providers may no longer hold data from previous years.

Identify what is missing, explain why and record any attempts to obtain copies from third parties. Do not create documents retrospectively or alter existing records to make them appear consistent.

A solicitor can assess whether other evidence, including customer records or independent tracking information, may help fill the gaps.

How Should I Respond if HMRC Requests Years of Haulage Records?

Before providing anything, check the legal basis for the request, understand precisely what is being asked for, note the deadline, and take legal advice. A broad or poorly framed request may be challengeable in its scope, its timing, or the legal powers on which it relies.

Understanding the legal basis

HMRC has statutory powers to require the production of documents and records, including under the Finance Act 2008. 

A formal information notice must identify the taxpayer or person whose tax position is being checked, the information or documents required, and the deadline for compliance. It carries appeal rights in certain circumstances.

If the request arrives as an informal letter rather than a formal notice, the legal obligation to comply is different.  An informal request does not carry the same enforcement consequences. 

A solicitor can explain the distinction and advise on the appropriate response in each case.

Checking scope and proportionality

HMRC may request records covering several years if they are reasonably required for a relevant tax investigation. However, you may need clarification if the request includes transactions, periods or documents that appear unrelated to the enquiry.

For example, a request covering the firm’s entire transport history may need to be considered against the particular loads HMRC is investigating.

Your solicitor can assess whether there are grounds to question the scope of a formal notice, seek clarification or request additional time.

Do not ignore a valid notice while waiting for advice, as missing its deadline may have separate consequences.

What Are the Potential Penalties for MTIC VAT Fraud?

The penalties on conviction for MTIC VAT fraud are serious. 

Understanding what is at stake is relevant to every decision made during the investigation, including whether to attend a further interview and how to respond to HMRC correspondence.

Sentencing under section 72 of the Value Added Tax Act 1994

For fraudulent VAT evasion offences committed on or after 22 February 2024, the maximum sentence in the Crown Court is fourteen years’ imprisonment.

For offences committed before that date, the previous maximum of seven years applies. The Sentencing Council’s revenue fraud guideline provides an offence range from a Band C fine to thirteen years’ custody.

Courts assess factors including the financial harm, planning, duration of the offending and the defendant’s level of responsibility. A transport operator who played a limited role would not necessarily receive the same sentence as someone who organised a substantial fraud.

However, the court must consider the actual conduct proved, rather than assuming that a person’s job title determines their culpability.

Sentencing for conspiracy to defraud and cheating the public revenue

Conspiracy to defraud carries a maximum sentence of ten years’ imprisonment. Cheating the public revenue carries a maximum sentence of life imprisonment.

Both are serious offences, but their legal requirements differ from fraudulent VAT evasion. The prosecution must establish the necessary dishonest conduct and involvement under the relevant charge.

A solicitor can explain which offence HMRC or prosecutors are considering and what the evidence would need to establish.

Business and civil consequences alongside criminal proceedings

An MTIC VAT fraud investigation can affect your haulage business even before any criminal charges are brought. HMRC may separately examine VAT returns or seek to deny input tax recovery where the legal conditions are met.

Customers may also review contracts or suspend work while the investigation continues. If you are a company director, a conviction or findings about your conduct could create separate disqualification risks.

These consequences do not arise automatically. Each depends on the relevant legal or contractual requirements.

Speaking to a Solicitor About Your Position

If HMRC has already interviewed you under caution about loads your haulage firm transported, a fraud defence solicitor can review the interview and assess the allegations against you.

They can examine the transport documents, identify evidence of genuine deliveries and advise whether HMRC has grounds to allege knowing involvement in VAT fraud.

A solicitor can also review requests for historical haulage records, advise on further interviews and consider any related civil VAT proceedings.

Ashmans Solicitors advises individuals and businesses facing fraud and financial crime investigations, including allegations involving transport and supply chains.

Send an Online Enquiry to discuss your position and next steps with our fraud and financial crime team.