Generally if a business is never paid for its goods or services, it either does not have to hand over VAT or can reclaim VAT that has been paid. However, if an employee steals money from the till for example, the VAT still has to be paid because the business has been paid for its goods or services. A recent case found that if an employee has diverted funds directly from the customer to themselves, then the business never was paid and therefore the VAT is not due.