Tax Fraud convictions
The convictions following a significant tax fraud have recently been publicised.
The fraud resulted in a loss to the exchequer of almost £750,000 in income tax, national insurance and VAT. A jury at Reading Crown Court found three members of the same family guilty of cheating the public purse and the criminals were sentenced to jail terms ranging from 16 months to 4½ years and disqualified from being company directors for between 5 and 10 years. A fourth family member who pleaded guilty was given a suspended prison sentence.
The fraudsters operated a legitimate business which supplied construction workers to construction sites in the London area. During the investigation, HMRC found that of the 200 employees only 87 were identified as using legitimate National Insurance numbers. The payroll records showed that false National Insurance numbers were used by the fraudsters for the balance of their employees.
The fraud was effected through the use of a sham company which enabled the owners to evade paying tax and national insurance contributions which had been deducted from employees’ pay. The sham company also enabled the fraudsters to suppress the VAT liability of the legitimate company.
The proceeds of this fraud were used to fund the family’s extravagant lifestyle. Following the arrest of the suspects, the head of the family remortgaged a number of properties, removing equity of £800,000, which he transferred to India. Confiscation of the Indian assets is now being sought.