Will Brexit create more opportunities for fraudsters?
KPMG's Fraud Barometer recorded around £89 million of duty evasion in 2018, the highest value recorded, with the number of fraud cases relating to tobacco products more than doubling in 2018 from 16 to 41.
Cross-border smuggling is also one of the largest fraud types coming to Court - the most common goods were counterfeit pharmaceuticals and pirated digital media. Missing trader intra-community (MTIC), or "carousel" frauds, complex frauds which took advantage of a change in multi-jurisdictional tax laws, have been one of the biggest drivers of fraud recorded in the three decades of the Fraud Barometer. It is estimated to have cost the UK public finances £25-30 billion.
With new customs arrangements coming into play post-Brexit, the potential for professional criminals and misguided businesses to exploit or abuse untested technology or tax collection mechanisms is not insignificant.
"How Brexit will impact fraud levels is yet to be seen, but new systems and new landscapes, such as new tax and customs arrangements, have in the past opened new and lucrative loop holes ripe for the picking from unscrupulous criminal gangs and businesses looking improperly to cut their costs."
James Maycock, Partner Forensic, KPMG in the UK.