UK carbon fraud measures could impact market

US carbon market

The UK tax authorities, HM Revenue & Customs (HMRC), will reintroduce value added tax (VAT) charges on carbon credits from November, a move that market participants say will result in extra bureaucracy and costs that could impact trading patterns.

HMRC removed the levy completely on July 31, 2009 in an attempt to combat increasing incidences of VAT fraud, known as carousel fraud, in the European carbon markets.

Carousel fraud involves fraudsters setting up a bogus company that charges and collec