Fraudulent electrician jailed for VAT fraud
An electrician has been jailed for 10 months after he was found guilty of VAT fraud. HMRC investigators discovered that the electrician had registered for VAT in 2006 and had made no payments to HMRC whilst at the same time claiming £40,000 in repayments. HMRC investigators were able to prove that the electrician actually owed HMRC nearly £80,000.
Paul Barton, Assistant Director of Criminal Investigations at HMRC, said that the electrician‘thought he could abuse the VAT system by submitting false VAT returns to generate repayments, and claiming that his business was not making any money. He said he had borrowed money from family members to keep him afloat, but HMRC’s investigation revealed that to be a lie.’
The jailing of the electrician followed the ending of a disclosure opportunity that offered electricians the chance to disclose undeclared income and bring their tax affairs up to date. The deadline to notify HMRC of their intention to regularise their tax affairs expired in May 2012. The Electricians Tax Safe Plan (ETSP) was designed for people who worked installing, maintaining and testing electrical systems, equipment and appliances.
Making a disclosure to HMRC as part of any of their campaigns allows taxpayers to take advantage of the best possible terms. Once the time limit for a campaign has expired HMRC focuses on the non-compliant taxpayers who chose not to take up the opportunity. Taxpayers will be actively targeted by HMRC using cutting-edge tools such as ‘web robot’ software to search the internet and find information on taxpayers’ activities. The penalties can be as high as 100% of the additional tax due and there is also the risk of a criminal investigation.