[Deej]

Probe over wheelchair 'car fraud'

Six disabled people have been arrested in connection with what is believed to be the widespread abuse of a scheme to help wheelchair-users buy cars.
An investigation for BBC Radio 4's You and Yours programme revealed some had repeatedly bought high-value cars VAT free, then sold them for huge profits.

The BBC's Shari Vahl said it was believed those involved had made hundreds of thousands of pounds.

One group is now under investigation by the government and police.

The case will be dealt with by the Department of Work and Pensions (DWP) and South Yorkshire Police Fraud Squad.

The DWP has launched an investigation into alleged benefit fraud and six people have been released on police bail pending further inquiries into alleged money laundering offences.

Wheelchair-users are allowed to buy new cars - adapted for them - free of 17.5% VAT, but only for personal use.

A specific group of wheelchair users is now under investigation over allegations that, using their disabled status, they bought up to 60 new high specification Range Rovers each over the last two years.

They allegedly removed the adaptations and sold them as new immediately to a dealer for a profit.

Bentleys, Maseratis, Porsches and Lamborghinis are also understood to have been traded in this way.

Such a scheme would have meant brand new highly-desirable cars, sometimes with long waiting lists, were being made available to the public at substantial discounts while the wheelchair-users and dealers concerned made profits at the expense of the Exchequer.


Story from BBC NEWS:
http://news.bbc.co.u.../uk/6916333.stm

Published: 2007/07/25 18:21:37 GMT

© BBC MMVII

[JulesUK]

The most likely outcomes are the following:-

(a) Rampant anti-disabled reporting by the likes of the Daily Mail. I've not heard this report but I understand it refers to widespread abuse when in fact only six disabled people were involved

(b ) (More) Abuse of disabled drivers / disabled parking facilities by some non-disabled people, using (a) to justify their actions to themselves.

(c ) A tightening of the VAT rules. It suggests that the people involved were having cheap easily removable adaptations made to the cars to get the VAT exemption (eg a knob on the steering wheel apparantly) then removing the adaptations and selling the cars on at a profit.

Doing this the people involved could buy say a Range Rover that normally cost £30,000 inclusive of VAT for £25,531.91, saving £4468.09. They'd also have to pay for the adaption but that might only cost £100 - £200 say.

The fraudulent bit is that they weren't using the adapted cars for their own use but selling them on immediately at a profit (and repeating it - 6 people bought and sold sixty cars in a year allegedly).

However, this may well prompt the authorities to tighten up the rules. The case highlights the fact that you can save a large amount of VAT for a small outlay on an adaption. If you do this genuinely for your own use then that is perfectly legal and above board. Whether that is morally right or what the regulations were intended to allow when they were enacted is another point. Some might say that maybe the VAT exemption should be limited to the cost of the adaption, not all of the VAT on the car maybe.

I guess many disabled people would say that they face so many disadvantages, they are not doing to feel guilty about taking advantage of this VAT rule.

This post has been edited by JulesUK: 27 July 2007 - 09:44 AM

[HiltonP]

I had a good chuckle at this post!

It reminded me of the last time I purchased a car free of duty/VAT (two years ago). Bearing in mind I am a quad, and have been permanently in a chair for 32 years. There were reams of paperwork, doctors assessments, provincial assessments, government assessments, etc (five separate groups of assessors).

When I queried the status of the application (it had taken more than six months) I was informed, in writing, that wheelchair people could not be trusted, and they therefore had to thoroughly crosscheck our applications! I have that in writing!

The application ended up taking so long (nearly 10 months) that the new car price increased, and my existing vehicle's re-sale value decreased, so I ended up saving nothing . . . in fact I would have been better off just buying one off the showroom floor.

[Adrian]

I bought a new Golf without the VAT late last year and all I had to do was to sign a form saying I was disabled and provide my Excise Duty exemption form.

I had more extensive adaptions done than just a steering knob, push/pull hand controls too, but all in all the scheme saved me more than £3k in VAT so I'm happy.

The Customs and Excise should have systems in place to catch this type of fraud as it happens. I don't know the rate that you are allowed a new vehicle without the VAT; but I would assume that it's greater than one year between each one. You have to accept now that in this day and age that there are people with no scruples that will think nothing of making a fast illegal buck to the long term detriment of the genuine people that would like to make use of the perk.

[russ1]

I've bought two cars in last three years VAT free and the paperwork was minimal, one form to sign and although I did give them a copy of my DLA mobility entitlement letter it's not actually a requirement of the scheme.

[Chrisonwheels]

I thought it was the sort of thing that Motability did all the time; buying cars on the cheap and then flogging them off at a profit after a few years.
-Oh, silly me, I forgot; they're a charity aren't they?
They'd never rip anybody off, would they.

[koba]

i want a new ford focus and could save 2000 pounds here but would i be doing any think wrong

would i be breaking the law if i got someone who was disabled(in wheel chair) to buy it in his name then sell it on too me right away

[LuckyinKentucky]

Illegal probably, immoral definitely. But if you did you would have the distinction of knowing that you were part of the cause that brings further red tape for those who actually need the program. But then again maybe the system needs tightening if it's such an easy idea for you to entertain.

[kewlcatkez]

LuckyinKentucky, on Oct 29 2007, 02:15 PM, said:

Illegal probably, immoral definitely. But if you did you would have the distinction of knowing that you were part of the cause that brings further red tape for those who actually need the program. But then again maybe the system needs tightening if it's such an easy idea for you to entertain.

well said

[koba]

ok update
mate in wheelchair said he could buy a car for me
he saids i wont be breakin the law as i will be buying a car with me being the 2nd owner so it would be worth less anyway.

so my question is if i go ahead with this am i breaking the law?


please dont all take this the wrong way i am only trying to get a cheap car for me and my 2 kids what i have

[Rotarymotion]

koba, on Nov 1 2007, 06:51 PM, said:

ok update
mate in wheelchair said he could buy a car for me
he saids i wont be breakin the law as i will be buying a car with me being the 2nd owner so it would be worth less anyway.

so my question is if i go ahead with this am i breaking the law?


please dont all take this the wrong way i am only trying to get a cheap car for me and my 2 kids what i have

I assume you are just trying to wind people up, but just in case you do not understand the law, here is the answer:

Your friend will be breaking the law by committing a VAT fraud; he is asking for the vat concession even though the intent is to benefit you, not him. You are a party to this VAT fraud and are therefore also breaking the law.

Fraud is a very serious offence, which is why the penalties are so severe, often including a custodial sentence (jail to you).

However, a conviction for fraud has far more serious consequences for you later in life. You will probably not be able to obtain any insurance with a conviction for fraud. This has knock-on effects. e.g. You won't be able to get a Mortgage if you can't get insurance on a house.

Please don't ask again.