A London based shop keeper has been jailed for VAT fraud of £120,000. Mr. Alaina Imponge, resident of Hartnoll Street, Holloway, carefully used 7 seven limited companies for VAT refunds 2011 and 2014 for 85 mostly false repayment claims. HMRC became suspicious as his companies constantly made claims for repayments totalling almost £126,000. He was jailed for 3 years 12 November 2018. See more…
This client is based in Essex and provides transportation services. The client had received a VAT investigation going back four years and HMRC were initially asking for a substantial tax amount together with penalties and interest. Our tax specialists considered the case in depth a found that the basis of VAT assessments raised by HMRC were incorrect. We sent our technical analysis together with supporting documentation to HMRC. Initially, HMRC refused our technical position and requested further supporting documentation. After several exchanges of technical correspondence the HMRC officers accepted that our position had been correct from the outset and that no tax was due by our client. To make matters even better, HMRC accepted that our client was due a tax refund. We are grateful to the HMRC officers involved in this case for their practical approach towards resolving this fairly complex matter.
Our analysis: This case could have dragged on for a long time and is a good example of cooperation. The main factors for early closure were establishing a good relationship with the HMRC inspectors and providing the required information in an effective manner.
This client runs a retail outlet in London and had received a VAT and Customs investigation from HMRC. The client was naturally quite nervous despite being up to date and having paid all their taxes due. Our tax specialists reviewed the client’s records in depth and proposed to meet with the HMRC inspectors. The meeting lasted for approximately an hour and soon HMRC officers accepted that there were no major issues with the company’s VAT and Customs liabilities and that the client’s arrangements were in good order. This was subsequently confirmed in writing by HMRC. We are grateful to the HMRC officers involved for their quick understanding of our client’s business and their pragmatic approach bringing the enquiry to a closure.
Our analysis: This was an interesting case where our firm and HMRC worked in cooperation to bring an early and effective closure to a tax investigation. We have seen numerous cases where due to the wrong or defensive stance taken by ordinary accountants, the relationship is tarnished and causing irreversible damage to the enquiry.
A businesswoman, Claire Gould, resident of Houghton Le Spring has been jailed for VAT fraud. Ms. Gould used fake invoices to claim back VAT of £175,000 from HMRC. Her fraud was uncovered after an investigation by HMRC’s specialist team. She has received a confiscation order of £80,509 but has only paid back £7,000. If she fails to pay the confiscation order within two months, she will face another eighteen months in prison. Read more..
This case came to us from an accounting firm in London. After the client received the tax investigation letter from HMRC, their accountants absconded and closed their offices and stopped taking any calls or letters! The client was ultimately referred to our firm. There had been errors in the VAT returns and the accounts with respect to the level of income declared. The HMRC enquiry comprised VAT, corporation tax and self assessment for the director. In total HMRC were seeking over £350k. We spoke to our client in detail in relation to the level of business and activities including the sales trends. Our client accepted that they had been misled by their accountants and as a result had paid less tax. However, the level of sales estimated by HMRC were substantially higher than the actual sales over the previous several years. This meant that the tax assessments raised by HMRC were much higher than the actual liability. Our team of tax investigation specialists referred the case to Alternate Dispute Resolution (ADR) to present our client’s case prior to going to the First Tier Tax Tribunal. After seven hours of discussions and negotiations in the ADR meeting with HMRC and ADR facilitators, we finally reached a settlement of roughly 25% of the original amount being assessed. Our client was happy to accept this figure and HMRC also accepted that the quantum of sales omissions were not as high as initially estimated. A written agreement was reached at the end of the meeting and both parties walked out happily. Our firm is grateful to the HMRC officers (including senior officials) involved in the ADR meeting for their level of cooperation, understanding our client’s position and keeping an open mind in relation to the facts.
Our analysis: This was a rare case where an accountant had absconded after their client received a tax investigation letter. The level of irregularities conducted by the accountant as described by the client were disturbing and shocking both for our firm and HMRC. Our firm tried on many occasions to contact the previous accountants but their office was closed. We have come across a number of situations where a tax payer has got into significant problems due to negligence by their accountants. It is sad to see that a number of businesses do not carry out due diligence before appointing an accountant and are mainly focused on the lowest possible fee in the market where quality of work is significantly compromised. The same people then pay a lot more in taxes, penalties and professional fees after being investigated by HMRC.