News Business Crime & Financial Services 27th Jul 2016

Defendants accused of cheating Her Majesty’s customs of £500,000 avoid immediate custodial sentence

The defendants stood trial on multiple counts of cheating the Public Revenue. The prosecution case was that they did so by dishonestly failing to declare VAT. on sales made between 2010 and 2012 by three companies. H was said to be the principal behind the fraud assisted by his “sidekick” C.

The alleged cheat had a value of approximately £500,000.00.

The modus operandi was said to be a combination of the submission of VAT returns containing false trading figures in addition to, on occasion, the failure to submit VAT returns at all.

The companies were concerned in the supply of agricultural workers to horticultural companies who, in turn, provided potted plants to major supermarkets and garden centres. As these were taxable supplies, the companies allegedly under the control of the defendants were required to invoice the horticultural companies for the cost of supplying the agricultural workers plus VAT and to, thereafter, account for these sums to HMRC minus the offset purchase invoices.

On day 9 of trial, following lengthy negotiation with the prosecution, agreement was reached whereby the defendants pleaded guilty to various counts under the Fraud Act; C to a single count, reflecting the provision of misleading representations concerning the submission of two Value Added Tax returns with a combined value of less than £4000; H to two counts representing the submission of five returns with a total value of approximately £100,000.

The agreement reached resulted in both defendants avoiding an immediate custodial sentence. Additionally C will not face confiscation proceedings or any order as to costs.

For the defendant C; David Howker QC led Scott Ivill, instructed by John Barnes of JD Spicer Zeb.

For the defendant H: Martin Hicks QC was leading counsel instructed by Namita Pawa of Hallinan Blackburn Gittings & Nott.

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