Innocent businesses could be liable for missing trader VAT

The Revenue Commissioners have just published up to date guidance on their application of existing legislation which can clearly be taken as a marker of intent to their focus on VAT evasion and missing trader fraud.

Section 108C VAT Consolidation Act 2010 provides that where VAT has been fraudulently evaded, an accountable person who knowingly or recklessly participated in transactions connected to that fraudulent evasion of VAT is jointly and severally liable for the VAT that has not been remitted. Revenue may notify them accordingly.

An accountable person does not have to be directly involved in the evasion of VAT in order to be jointly and severally liable.

VAT which has been fraudulently evaded will have been evaded by the person primarily liable for payment of that VAT (“first accountable person” in the legislation).

However, the person to whom section 108C applies is the other person who is jointly and severally liable for that unpaid VAT, due to their participation in transactions involving the same good(s) or service(s) (“second accountable person” in the legislation).

Where particular goods or services pass through a chain of transactions involving a number of persons, any or all of those persons who knew or were reckless as to whether or not there was fraudulent evasion of VAT in relation to the supply of those goods and/or services, may be notified that they are jointly and severally liable for the unpaid VAT in addition to potential interest but not penalties.

While the intended purpose of this legislation and approach by Revenue is to encourage compliance and to provide Revenue with a power which, if used appropriately, will assist in tackling VAT evasion, businesses should take any necessary steps and professional advice to ensure that their accounting and procurement systems mitigate against such risk exposure.

If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars VAT team below:

Staff Member




Frank Greene

Tax Partner

01 449 6415

Alan McManus

Tax Director

01 512 5525


September 2021

Tax news