Saturday, 31 October 2009

£1.9 million VAT fraud exposed, eight jailed

There were three financial advisers among the fraudsters. They had set up limited companies trading fictitiously in children’s clothes, fruit and vegetables and animal feed. As a result, they were able to claim the VAT on bogus business expenses; there is no VAT due on the fake sales of those items as they are zero rated. They then pocketed the VAT refunded to these companies and invested it in property and to fund their lifestyles. Those jailed face confiscation hearings to recover monies and assets involved. We understand that the fraud was discovered when suspicions were raised during an investigation into these companies by Customs & Excise when C&E officers attempted to verify those business claims (a routine procedure when it comes to significant VAT claims) and during routine VAT visits to inspect records. The case was then passed to HMRC criminal investigators.

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