VATF36210 - What to consider prior to determining whether to use an intervention: matters to consider when looking at particular types of taxable person or activity: box breaking and box consolidation: introduction
There is continued evidence to suggest that individuals and/or businesses previously involved in Missing Trader Intra-Community (MTIC) and Supply Chain fraud (VATF23500) are engaging in box breaking and box consolidation.
It should be noted that box breaking and box consolidation are not, in themselves, illegal activities.
There have been reports of VAT irregularities occurring with box breakers, such as:
- false invoicing;
- multiple use of invoices;
- inadequate accounting systems; and
- possible links to the manipulation of the reverse charge for specified goods and services (VATREVCHG).
The above list is not exhaustive.
In this section of the guidance the following terms are used:
- 鈥榖ox breaker鈥� refers to a taxable person who purchases mobile phones that are locked into a particular network and unlocks them so that they can be used on any network;
- 鈥榖ox consolidator鈥� refers to a taxable person who purchases 鈥榮im free鈥� mobile phones or other goods from either retail outlets or from other box consolidators or box breakers and consolidates these purchases into a single onward order;
- 鈥榬unner鈥� refers to an individual (whether an employee of the box breaker or box consolidator or not) who makes the purchases from the retail outlets .
This section of the VAT Fraud Guidance Manual has been written to assist you when conducting assurance visits on box breakers and box consolidators. It: