The prime minister has labelled HM Revenue and Customs’ (HMRC) Extended Verification crackdown on VAT fraud as “proportionate”.

Responding to a petition launched more than a year ago by a former mobile phone trader, the Prime Minister’s Office said it was taking appropriate action against the threat of fraud in the mobile phone and components industry.

Monty Jivraj, previously an employee of Olympia Technology, which recently won a tribunal appeal against HMRC, managed to gain more than 600 signatures for the petition, which claimed HMRC was “intentionally driving UK business into voluntary liquidation”.

In a lengthy statement, the Prime Minister’s office said: “Faced with an organised attack on the VAT system, the government took appropriate action to protect the revenue. Our response has been proportionate, targeted and risk based, focusing on trading activity linked to fraud.

“To date, in more than 95 per cent of cases where VAT returns are subject to Extended Verification, HMRC has found that the traders had been participating in or profiting from trading activities linked to VAT fraud.”

Jivraj, now a consultant to law firm Ashton, said: “This response shows our voice is being heard and there are ways to get our point across.”

However, Anthony Elliot Square, director of industry body the Federation of Technological Industries, said the response was “pathetic”.

“There is no way taking two and a half years to process a VAT claim can be proportionate. HMRC’s response is not targeted; it is aimed at the entire industry,” he said.

The full Number 10 response can be found here.

Jivraj has since launched a second petition against HMRC and is appealing for firms to add their signature to the list. This petition can be found here.