The Daily Mail reports that the legal action, which dates back to 2009 just months after the bank was bailed out by taxpayers, alleges that two traders at the bank carried out deals which helped fraudsters cheat Revenue & Customs out of millions of pounds in VAT payments.
High Court documents seen by The Mail on Sunday claim that RBS traders were ‘wilfully shutting their eyes to the obvious, which was that there was no legitimate explanation for the trades and that they were connected with VAT fraud’.
The claim centres on a so-called carousel fraud in which traders buy and sell goods and so register a VAT charge on the trade, but never actually pay the VAT. When the goods are sold the VAT is then reclaimed.
In this instance carbon credits – which are in effect pollution permits issued by the EU – were bought in France, imported into Britain by allegedly sham companies which then sold them on to a series of other allegedly fake firms.
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