Unwitting Businesses May Pay Twice in UK Carbon Credit Scam

August 31, 2009

Email this story Print this post Add your comments

Businesses that unknowingly participated in a suspected carbon trading scam could face millions of dollars in legal fees and penalties, reports the UK Sunday Times. Any company involved in the scheme may be subject to an audit.

Uncovered by HM Revenue & Customs (HMRC) in January, this “carousel fraud” involves carbon offsets that are imported into Britain without paying value added taxes (VAT) and then sold to companies, each of which is liable to pay the standard rate of VAT on the purchase, which as of last year was 17.5 percent, according to the Sunday Times.

The potential liability for businesses is significant because the government has the right to reclaim the VAT on any carbon trade it thinks is suspicious, and companies can also be penalized retroactively for three years, reports the UK newspaper. The average value of a single carbon trade is £50,000 (about $81,000), according to the article.

HMRC’s advice to businesses is to know your customer, supplier and products, but business groups said this was not good enough because anyone can register as a carbon trader, according to the Sunday Times.

Other countries also expect they will face similar challenges. As an example, Australia recently gave its federal police the ability to enter company premises and request paperwork in order to prosecute a new range of climate offenses including bogus carbon offset schemes and under reporting of carbon emissions.

Email this story Print this post Add your comments

Advertisers

Enhance Sustainability. Improve Profitability.

Learn how at the SAP Sustainability Resource Center. >>

Unclear about the EPA's new GHG Rule?

Learn how it could affect your business. >>

EPA mandatory emissions reporting starts Jan 1st

CSA Standards can help your organization get ready for compliance. Find out how. >>

Survey Results: Product Environmental Compliance Best Practices

How to achieve compliance at a significantly lower cost. Download the full report. >>

Join the Discussion

Recent Daily News [ see all ]

11/20/2009
11/19/2009
11/18/2009

Charts [ see all ]

European Paper Industry Cuts CO2 Emissions by 42% since 1990

S. America Takes Most Urgent View of Copenhagen Talks

Nike Tops Annual Climate Action Scores

Oceans May Trap more Carbon than Forests

Jobs

View All Jobs >> Post a Job >>

Comments and Discussions

Trade Association on Trade Group on EPA Chemical Regs: ‘If Everything is a Priority, Then Nothing is a Priority’
"Seriously… that..."

Gary Markowitz on Supermarkets Tackle Emissions Reductions, Fuel Efficiency
"Supermarkets waste over 10 percent of their energy through improper..."

peter in ireland on Ontario May Follow California’s Lead on TV Energy Efficiency
"Governor Schwarzenegger is shooting himself in the foot! 1...."

Environmental Leader on S. America Takes Most Urgent View of Copenhagen Talks
"The survey respondents (the PDF report mentions 4,000 respondents in 38..."

Jake on UPS Trying New Hydraulic Hybrid Trucks
"A point of clarification: the Reuters press release referenced herein reports that 20 UPS will purchase..."

Custom Organic Shirts on S. America Takes Most Urgent View of Copenhagen Talks
"90% of North Americans believe it is urgent to get a global climate..."

peter dublin on California City’s Green Building Ordinance Applies to Commercial Buildings
"Why energy efficiebnt regulation on buildings –..."

Environmental Leader