VAT fraud is costing the British taxpayer four times official estimates, the BBC claims.
The Panorama programme says it has obtained information that shows VAT fraud was £8.4 billion between June 2005 and June 2006.
This is five times more than the amount lost to VAT fraudsters by any other European Union country, the programme's makers say.
But the Treasury said it "does not recognise" the figures. Government figures put losses to VAT fraud at up to £1.9 billion in 2004-5.
Estimates for 2005/06 are not due until the publication of the pre-Budget Report towards the end of this year.
"Carousel fraud" or missing trader intra-community (MTIC) fraud - involves the repeated importing and exporting of goods with VAT being reclaimed each time.
The new research was carried out by a Belgian-based anti-fraud group, the BBC said. A new VAT system aimed at tackling the scam is being planned.
Called a "reverse charge", it would mean that for some electronic goods, such as mobile phones, only the final retailer will be able to levy VAT.
A Treasury spokesman said that recent figures in fact show a "significant reduction" in the level of trading associated with MTIC fraud.
He said: "We cannot comment on the substance of this report and we do not recognise the figures that are set out for the UK. The UK Government has published fraud estimates for the past five years, and is the only EU country to do so - estimates will be updated in the next pre-Budget Report."
