Draconian new powers to crack down on VAT fraud are being used by HM Revenue and Customs for the first time despite outstanding

Draconian new powers to crack down on VAT fraud are being used by HM Revenue and Customs for the first time, despite outstanding legal challenges.
Powers to hold companies in a trading chain responsible for the non-payment of VAT by other companies in the same chain were introduced as part of a new policy on VAT fraud – an activity costing the taxpayer up to £2bn a year.Joint and several liability was introduced in the 2003 Budget in anti-fraud measures targeting the trade in mobile phones and computer chips.Other new powers allow Customs, which is merging with the Inland Revenue under the guidance of former mmO2 chairman David Varney, to stop VAT payments. Police believe animal rights extremists were responsible.David Blunkett, the Home Secretary, said last week that the amendments to legislation proposed in the summer will be a “real issue in the coming session”, suggesting that they will be included in the Queen’s Speech next month.But the drugs company AstraZeneca also said last week it was moving some research jobs to the US and Asia, partly due to the extremists’ activities.. But there have been no further developments beyond this.”Concern over the influence of animal rights extremists resurfaced earlier this year when construction company Montpellier cancelled a contract to build an animal testing laboratory for Oxford University after employees, shareholders and suppliers were targeted by extremists.The grave of an 82-year-old woman whose son-in-law runs a farm that breeds guinea pigs for medical research was desecrated earlier this month. While informal talks are continuing on these issues, City sources say that many institutions and companies have decided that dealing with the extremists is a matter best left to the police and to a new task force with stronger powers.The National Association of Pension Funds, which represents pension funds managing more than £600bn, has been one of the few City organisations to actively seek views on the most effective response.A spokesman said: “There have been informal discussions over whether there is an issue, whether there is likely to be one, and if the answer is yes to both, who best and how best to address it.

City plans to combat animal rights extremists who target companies and their employees have stalled as companies and institutions fear becoming targets themselves.
Plans to form a task force of City grandees to co-ordinate self-policing initiatives have foundered because of difficulties in recruiting a chairman.Proposals for a “bounty” fund to pay for information leading to the arrest of animal rights and other single-interest group extremists targeting companies and their associates have also yet to get off the ground.Beside tougher new laws on the activities of extremists, City figures have been trying to draw up guidelines on how to prevent companies and individuals being targeted and how to counter intimidation tactics. “A decision hasn’t been made because there’s tension between the Department of Trade and Industry and the Department for Work and Pensions about how to resolve this issue.”Law firm Allen & Overy has warned that the new laws pose a substantial burden on businesses and they are likely to affect employer schemes such as pensions, loyalty and redundancy programmes, as well as remuneration.Allen & Overy partner Julie Quinn said companies’ mandatory retirement ages were likely to be found discriminatory under the rules.. The towns of Iskandariyah, Latifiyah and Mahmudiyah, and the area in between, has been labelled the “triangle of death” by the Western media. The Americans call it the “rat run” to Fallujah, the feeder route through which insurgents, including the group led by Jordanian-born Abu Musab al-Zarqawi, had been moving their fighters and weapons to carry out devastating attacks on Baghdad.The 850 British troops are expected to take over from the US bases in Iskandariyah and Kalsu, a large village further west. When the US marines moved into Iskandariyah following a major operation two weeks ago, the base was mortared 40 times in 10 minutes, 25 were injured in 24 hours and there were 18 roadside bombings in the next three days.The Americans abandoned patrolling the west side of the Euphrates after coming under repeated attacks. The militants took over and it became a “no-go” area with masked insurgents setting up checkpoints and carrying out abductions.

Sunni foreign fighters declared they were establishing an Islamic “Caliphate” in the triangle, enforcing strict Wahabi rules.Two weeks ago, US forces belatedly attempted to retake the area, launching Operation Phantom Fury with hundreds of marines, Cobra attack helicopters and AC-130 gunships. Major Matt Susse, of the 1st Battalion, 2nd Marines Regiment, said: “We have to take it. This area is directly tied to the security situation in Baghdad. They are using it to move car bombs, mortars and rockets.”Afterwards the Americans claimed that the area was “pacified” But bombings and shootings have continued daily. Just last week in Latifiyah a local Iraqi politician who had criticised the insurgents was chased in his car through the main street, cornered and shot dead.Among the questions that remain unanswered is whether the British or Americans will provide tank and air cover and who will replace the soldiers when they leave in 30 days’ time. Battlegroups of the Scots Guards and the Queen’s Lancashire Regiment are in Cyprus if a “surge requirement” is needed in the run-up to the elections in January.For the elections even to be possible, however, the US is convinced it must first subdue Fallujah. The city is in the process of being encircled by armoured troops from the US Marine Expeditionary Force and the US army, backed by close support from Apache and Cobra helicopter gunships, AC-130 Spectre and A-10 Warthog close-support aircraft, and fighter-bombers of the US Air Force.

By strangling on the ground and striking from the air, it is hoped that the back of the insurgency and the squads of killers loyal to Zarqawi will be broken. The Black Watch is part of a blocking force to prevent rebel reinforcements getting to Fallujah from the south, through the plains of ancient Babylon.However, few in the American and British commands can now seriously believe that fixing and destroying the enemy in Fallujah will bring an end to the troubles of Iraq. The Government has been forced to set up a consultation group to consider whether it should ban companies from having mandatory retirement ages after failing to reach a decision within its own ranks. This is despite the fact that an investigation by the energy regulator Ofgem earlier this month found no evidence of artificially inflated prices on the spot market.Mr O’Neill told The Independent on Sunday:”If it becomes clear that through no fault of their own companies have been making significant profits [because of any manipulation of the gas market], we could use a windfall profits tax to help disadvantaged consumers.”He added that a tax would only be levied if it did not have a damaging effect on companies’ investment plans for exploration and production in the North Sea.A spokeswoman for the North Sea offshore operators’ association, UKOOA, said: “Any windfall tax would put investment and jobs at risk.”. North Sea oil and gas companies could be hit with a windfall tax on profits if evidence is found of manipulation of the gas market, the chairman of an influential committee of MPs has warned.
Martin O’Neill, who heads the Trade and Industry Select Committee, said that even those companies not found guilty of any manipulation of the market would still be liable for any tax as they have still benefited from high prices.The forward price for January delivery of gas in the UK is 55p per therm, around three times more than prices during the winter of 2002-03 and is the main reason why domestic and industrial fuel bills are soaring.At the end of next month, the committee will begin hearings to question oil companies, including BP and Shell, over the steep rise in wholesale gas prices. Suicide bombers killed at least 22 members of Iraq’s fledgling security forces yesterday amid a spate of insurgent attacks across the country that also left six US servicemen injured, four civilians dead and a sabotaged pipeline that was still blazing at nightfall.
The surge in violence came the day after Care International, the charity for whom hostage Margaret Hassan works, made a statement on the Arab television station al-Jazeera emphasising her Iraqi credentials.