After passing from one so-called "buffer" company to another, a broker would finally export the same items, claiming a VAT refund.

BBC: Shahid Ramzan

The exporter then claims back, and receives, a VAT refund from what appears to be a genuine transaction, but because the refunded VAT hasn't been handed over in the first place, HMRC makes a loss.

BBC: Details of Dundee man's alleged multimillion tax scam

Customs and Excise would be out of pocket, with little or no chance of recovering the VAT to match the refund.

BBC: Shahid Ramzan