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5 year jail sentence for tax credit fraud in HMRC clamp down

5 year jail sentence for tax credit fraud in HMRC clamp down

Public sector tax fraud costs the Treasury an estimated £15 billion every year according to the National Fraud Authority.

This estimated public sector fraud figure is made up on £7 billion lost due to tax evasion, £5 billion by criminal activity and a further £3 billion that is stashed away in the hidden economy.

The Fraud authority’s figures also show that the total amount of fraud in the UK tops £38 billion and £21 billion of that is down to the public sector. In the private sector, the financial services sector has the highest amount of fraud at £3.6 billion whilst the fraud losses attributed to SMEs were £780 million.

The data proves that tax evasion is definitely the largest problem area, far overshadowing the £1.5 billion lost each year in benefit and tax credits fraud.

Last week, Ricards Virokaitis, a Lithuanian living in south-east London, was jailed for five years for his part in a £3 million tax credit theft. An HMRC investigation found that he was a central member of a gang who paid more than 100 women from Eastern Europe to enter the UK solely with the intention of registering for tax credits and benefits. The women were escorted by Virokaitis and his criminal gang while they claimed the benefits. The women then returned home and Virokaitis withdrew up to £90,000 each month through bogus bank accounts. Women with children were deliberately recruited in order to obtain the maximum benefits, an HMRC spokesman said.

The assistant director of criminal investigations at the Revenue, Simon Grunwell, said the HMRC is cracking down on benefit fraud and has received an additional £900 million from the government to tackle tax avoidance, evasion and criminal attacks. Criminal gangs such as Virokaitis’s are a menace and their activities are hurting honest taxpayers.

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Image: Hello There by josh-n

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