Tag Archive | "tax fraud"

“Champagne For Everybody!” Shouted The Accountant


We talk a lot about the trusted contractor accountants you can find on this site…but what about those accountants who are NOT on this site?

One such accountant was a guy from Galway In Ireland, who was hired to look after the books of a multi national company. The kind of company who turn over millions of pounds a year.

His “trusty” hands delved right into those books. Day after day. Month after month. And everything seemed to be going smoothly.

However, what the company didn’t realise is the accountant was actually putting his hands into the cookie jar, so to speak.

Rather than use those hands to soothe and save…he was using those hands to steal and spend.

How much exactly? £1.7 million pounds to be exact.

It was a secret though. He didn’t want anyone to find out. And he would have got away with it…but he took it too far.

If the expensive holidays, shopping trips and VIP seats at international rugby matches wasn’t enough to arouse suspicion…what happened at his son’s wedding definitely was.

“Champagne for everybody,” the accountant shouted. All paid for on the company credit card, of course.

The only problem is this was right under the noses of the company directors. They were right there at the wedding, drinking champagne they had unwittingly paid for.

Eventually they cottoned on to the fraud, and immediately contacted the Police.

This led to the accountant having his own special day in court, although there was no champagne and no holidays in the sun.

Instead, this particular courtroom had a stern looking judge sitting high above the accountant, and right now as we speak, that judge is sitting there with his hammer firmly in his hand…ready to dish out the rough form of justice that happens to any accountant who breaks the rules.

The accountants wife was also made to answer for these crimes, although she claims she didn’t know anything about it.

If you are a company owner, contractor, freelancer, or just generally self employed…don’t you agree that hiring an accountant like this is simply bad for business.

You don’t want someone drinking champagne and sitting on a tropical beach on your dime…do you? Of course not.

Fortunately, you are in the right place to find trusted accountants who won’t rip you off.

Most of the accountants recommended by us don’t even like champagne. They drink water, fresh and pure just like nature intended.

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Jose Mourinho Guilty of Tax Fraud


Things might not be going well on the pitch for Man Utd boss Jose Mourinho…and now off the pitch…even worse!

That is because he has just been found guilty of tax fraud by Spanish Authorities.

“Guilty!” The Spanish judge shouted as he or she slammed down that hammer in a Madrid Courtroom.

I reported about all of this a long time ago if you remember. In those blog posts I speculated about the possible guilt of Mr Mourinho, while also mentioning that all of this could have been avoided if he used reliable accountants from Contractor Accountants.

It’s possible Jose has now found our website and is keeping his nose clean with UK authorities, but that still doesn’t change the fact he now has to face up to his past crimes.

So what is going to happen with Mourinho? Will he be deported to Spain and then sent to a Madrid Jailhouse to serve time for doing the crime?

Will he become the manager of the Madrid Prison Football Team and turn those bunch of convicts into “special ones?”

Actually no. And in fact, he won’t even have to spend a single night inside a Spanish slammer…or an English slammer…or any kind of slammer.

Why? Because although Jose was found guilty and sentenced to a 1 year prison sentence, his sentence has been suspended, which means as long as he stays on the straight and narrow then he won’t have to spend any time behind bars.

If reports are true and he is indeed using a contractor accountant to do all of his books now, then I reckon he is going to be just fine.

Just like the ordinary contractors in the UK. You might not sit in the dugout at Old Trafford and you might not walk out of press conferences with a “monk on” – but as long as you have a contractor accountant by your side then you won’t ever find yourself on the wrong side of the law.

Back to the story, and it looks like Jose defrauded the Spanish tax man or woman of a cool £2.9 million pounds, although it has yet to be confirmed whether or not he will have to pay that money back.

I’m sure Mourinho wouldn’t mind having to write out a cheque, as he is used to paying out large amounts of money and then not seeing much in return.

Anyway, Jose Mourinho can now focus all of his attention on getting Manchester United back to the top of the league, and you, the UK contractor, you can focus all of your attention on hiring a contractor accountant, right here.

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Can’t Pay? HMRC Will Eventually Take It Away


Money laundering and VAT fraud were two crimes committed by a Preston man way back in 2015. HMRC were not impressed.

As soon as they caught this guy with his hand in the cookie jar they took him directly to court, and not surprisingly he was found guilty.

The judge slammed down that faithful hammer and ordered the Preston man to repay a staggering £590,000 for his crimes.

“I don’t have that kind of cash on me right now,” he is thought to have replied.

HMRC realised that a cheque wasn’t going to land in their mailbox anytime soon, although they did “reserve the right” to chase up payment at a later date.

Fast forward to 2018 and our man in Preston thought he was Scott free. He was living the life of riley with his feet up and playing online poker, day and night.

Then one day recently he struck it big it on the online poker tables…and with a pair of aces in his virtual hand he scooped up £70,000 from the pot and then called it a night.

Once that money was safely transferred into his bank account then he probably thought it was time for a holiday and a new car. Maybe even a brand new rolex to wear on his wrist.

What he didn’t realise is HMRC were patiently lurking in the background. Just waiting for a chance to pounce and get some of that money back.

Money which had been taken fraudulently and had been laundered don’t forget. In the opinion of HMRC and a court of law this was money which needed to be paid back.

So you can imagine the shock our man in Preston felt when he went to the ATM machine only to find a big fat ZERO staring back at him on the screen.

He no doubt went in the bank to see the manager.

“Just what is going on here?” he would have demanded.

“Your money has been taken…by HMRC,” the bank manager would have replied.

Poker winnings or not, HMRC were well within their rights to get that money and divert it into their own bank account. The court was on their side and nothing could stop them.

“He thought he had aced the tournament but we had the better hand in the end,” said a spokesperson for HMRC.

“We will not allow tax fraudsters to enjoy their winnings until they have repaid what they have stolen from the taxpayer,” they went on to add.

Did you know that contractors have their very own “ace in the deck?” They are called contractor accountants and they are there to make sure you stay on the right side of HMRC.

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Three Jailed for 19 years in £6.9m Tax Fraud


In the kind of of story that is becoming all too common, three businessmen have been sentenced to a total of 19 years for tax fraud.

The amount they defrauded from HMRC? Would you believe it totals £6.9m over just 2 and half years, which no doubt allowed them to live a life of luxury when they should have been paying tax.

It doesn’t matter if you are a contractor, freelancer, or self employed, make sure you get a good accountant to handle all of your finances, and then pay tax. It really is as simple as that.

Don’t get tempted into thinking you can get away with it, because ultimately when you are making millions of pounds you do attract the attention of HMRC, and if tax fraud is involved then expect to found out eventually.

The three men were sentenced at Maidstone Crown Court to 7 years and 8 months, 7 years and 6 months, and 4 years respectively, and will now be taken away to prison to begin their sentences. Not only that, but two of the men are banned from becoming company directors for 10 years.

During the trial, it was shown the three guys used a number of different tactics to avoid paying tax, as well setting up various offshore bank accounts and companies to hide all of the money. One of the main countries money was funnelled to is Gibraltar, with one guy having £1.2m in cash there alone.

Ultimately though, investigations by the HMRC found all the money, both in the UK and abroad, and it wasn’t long until they compiled their case and brought the guys to trial.

A spokesperson for HMRC commented, “We unravelled what they’d created and they are now paying the price. No one is beyond our reach.”

While I think it’s good they are out there catching people involved in tax fraud, one area I would like to see HMRC focus their attention is bigger companies who are paying virtually no tax in the UK.

I’ve talked about this before, with companies such as eBay, Google, Microsoft and Apple, who all basically pay very little tax in the UK.

Now, I’m not suggesting these companies are doing anything illegal, because at the end of the day, it is the job of any company, contractor, freelancer or self employed person to legally pay as little tax as possible. I just think they need to investigate the tax dealings of these big companies a bit more closely.

As for the three men jailed for a total of 19 years. Well, a court has decided their punishment, and now they must serve the time because they did the crime.

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It’s fraud, not avoidance, that costs HMRC the most


Here’s something I never thought I would hear Her Majesty’s Revenue & Customs say: tax avoidance is not nearly as big a problem as it appears to be.

Now, that’s not to say that tax avoidance doesn’t account for its share of lost revenue opportunities. The taxman says that around £3.1 billion in tax went unpaid due to avoidance during the 2012/13 financial year. However, this figure pales in comparison to how much tax fraud is costing the Treasury: the tax authority says that fraud activity saw £15.4 billion in taxes going unpaid.

The HMRC released figures recently that measured the tax gap for the year, revealing that the total figure was 6.8 per cent – or £34 billion. While you would think that the taxman’s insistence on stamping out tax dodgers would have put a dent in this figure, it turns out that it’s actually higher than ht year before: the 2011/12 year saw a rate of only 6.6 per cent. Still, both years are considered a success in the face of the 2005/06 year, where the tax gap was shown to be a much higher 8.5 per cent.

David Gauke, financial secretary to the Treasury, spun the figures as positively as he could by throwing the previous government under the bus. The tax gap has been lower than those experienced under the Labour Government since 2010/11, Gauke said, with a total savings of £4 billion. This just adds fuel to the fire for continued pressure to be placed on closing that gap even further, though let’s not forget that it’s an election year and that politicians are likely to say anything to stay in power.

So what does this mean for poor contractors and other self-employed Brits that have been feeling the heat of the Treasury’s constant pressure in rooting out tax avoidance? Well it’s likely to continue for the time being. Sorry mates, no respite here can be found. I suppose it’s cold comfort to know that at least you’re really only a very small percentage of the problem if you’re simply just finding it hard to navigate the minefield of IR35 guidance so the taxman doesn’t come breathing down your neck. However, I would like to see HMRC going after tax evasion a bit more vigorously than it is now. Whether that will actually happen is anyone’s guess though.

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HMRC warns contractors against tax rebate scammers


Here we go again – scammers and identity thieves have come out of the woodwork in an attempt to phish personal details from the nation’s self-employed.

Her Majesty’s Revenue & Customs says that the number of phishing emails in the three months prior to the 31 January self assessment deadline increased by a massive 47 per cent in comparison to the previous year’s figures. The total number of emails was more than 23,000 – and that’s just the ones that were reported to the taxman!

Of course, HMRC was quick to sound the warning that it never sends emails to taxpayers when they’re due a refund. Instead, the tax authority communicates only by post, and HMRC officials urged contract workers, freelancers, and other self-employed Brits to not fall into the trap just because they’re keen to get some money back from the Treasury.

Truth be told it’s getting harder to not run into some sort of tax fraud nowadays, as the entirety of last year saw more than 91,000 instances of fraud were reported to the taxman. It looks to me like scammers are stepping up their game by striking whilst those filing self assessment returns have their taxation responsibilities are forefront in their minds. For its part, HMRC is doing its best to close these bastards down, closing more than 175 fraudulent websites that were designed to trap taxpayers and trick them into giving over personal details. Considering that there were only 65 of these websites closed in January of 2013, I have to give credit to the taxman: well done, HMRC!

Yes, I know it sounds a bit odd for me to giving praise to the tax authority considering how I’ve been so critical of it in the past, but it’s instances like this that rekindles my faith in HMRC and its claims that it’s keeping an eye out for our best interests as taxpayers. Just because I don’t agree with every policy of the Treasury doesn’t mean I don’t appreciate the hard work the taxman does in trying its best to collect taxes fairly; it’s not HMRC’s fault if the laws and regulations they have to enforce come from dodgy sources, is it?

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Tax cheats caught red-handed, told to repay £1.2m to HMRC


Bad news for 14 individuals after they were caught red-handed in a tax fraud scheme, as they’re now on the hook for repaying £1.2 million to the taxman.

Her Majesty’s Revenue & Customs is hopping mad after it was discovered that one of their own helped divert PAYE funds away from their rightful places and instead into the pockets of himself and his 13 criminal comrades. Michael Kitchen, a formal HMRC officer, several of Kitchen’s friends, and five of his family members including his sister Stephanie Gough, were all found guilty of tax fraud, after it was found that Kitchen diverted funds away from nearly 160 PAYE payments to his co-defendants’ tax accounts.

Each defendant is now responsible for their share of the total amount embezzled from the taxman’s coffers. While some were lucky enough to be slapped with a fine and sentenced to complete community work, some, like Kitchen himself, now face jail time. The former HMRC employee has until May 2012 to repay £175,000 and must also serve a six year prison term after being found guilty for perverting the court of justice and cheating the public revenue.

HMRC internal governance official, Ian Horridge, condemned Kitchen’s abuse of his power in perpetrating the tax fraud. The taxman takes such offences committed by its own officials with the utmost of seriousness, leading HMRC to prosecute anyone found accused of tax fraud to the highest extent of the law, especially those who have been trusted by the Treasury to be honest and forthright, Mr Horridge added.

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Accountant to the stars charged with tax fraud


A 66 year old ‘accountant to the stars’ has been charged with tax fraud on allegations that he has been overstating the accountancy fees he has been charging to his clients, according to recent reports.

Christopher Lunn, an accountant from Tunbridge Wells with high-profile clients such as actor Sean Pertwee and TV star Fiona Bruce, has been issued a summons to appear on 15 August before Westminster Magistrates’ Court. Mr Lunn seems to have been pulling the wool over the eyes of all his star clients, as there have been no suggestions that they were aware of any possible wrongdoing on the part of their accountant.

Mr Lunn’s legal troubles do not stop there, as he also stands accused of a trio of separate charges claiming that he brought forward false losses for several other firms as he was acting as director for these companies.  The accountant is also accused of falsifying records when it comes to claiming costs for Christopher Lunn & Company, his accounting firm, to the tune of hundreds of thousands of pounds.

Jonathon Lunn, the man’s son and one executive of the firm, said in a recent interview that Christopher Lunn & Company is pleased for the opportunity to prove the allegations are without merit. The firm is also looking forward to its third HMRC judicial review, according to the younger Lunn, who added that the company is also anticipating the results of an investigation into several counts of serious maladministration.

Lunn has been in a heated battle with the HMRC for quite some time, winning a partial victory in February of last year. This past March, Lunn once more launched a legal conflict with the taxman as well.

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More debt collecting agencies are helping HMRC


HMRC is increasingly turning to debt collection agencies in its bid to boost its take of outstanding tax and VAT. Furthermore, the Government department is also becoming more reliant on credit agencies as it tries to reduce fraud.

Public services lose £31 billion each year due to fraud and error, and losses due to tax mistakes account for nearly 20% of that total.

According to the Credit Services Association, debt collection agencies were employed to chase debt worth £58 billion last year in the UK. During the second half of 2011, the total value of debt held by members of the CSA increased by 11%.

Sara de Tute, the president of the CSA, said its not surprising that debts have increased since the credit crisis. However, the increase is also due to new private and public sector creditors who now see outsourcing their debts to professional agencies as a valid means of recovering vital funds.

Overdue debts cost the government between £7 billion and £8 billion every year and 95% of that debt is owed to HMRC and the Department of Work and Pensions. The government has now asked collection agencies to help it recoup some of those debts.

The Revenue has introduced a process for screening tax credit applications and this has saved it £50 million. The department is also developing Connect, a new system that will identify tax fraud and non-compliance. HMRC is also conducting more tax investigations and has increased the number of people it prosecutes each year to 1,000.

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Image: Debt Trap Vector Illustration by Vectorportal

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Self-assessment tax fraud leads to two year jail sentence


A South African has been sent to jail after being found guilty of a £1 million self-assessment income tax fraud.

HMRC discovered that Lawrence Goldberg used virtual offices to register in excess of 50 companies throughout the UK. The companies posed as nominated tax agents and through them, Goldberg sent the Revenue more than 2,000 fraudulent tax returns. As well as using the identities of innocent people, he invented people and used their details on the returns.

When his operation was at its peak, Goldberg was sending HMRC about 500 false returns a week. Most of the fraudulent returns were discovered and not processed, but Goldberg did successfully claim more than £1 million which he deposited in offshore bank accounts.

Goldberg originally conducted his operations from London, but after a brief stay in Portugal he went on the run to South Africa. He pleaded guilty to the charges against him and was jailed for two years.

HMRC’s assistant director of criminal investigation, John Pointing, said this was a huge scale fraud against public funds and the Revenue will not sit back while criminals such as Goldberg steal honest taxpayers’ money.

Meanwhile, HMRC has warned taxpayers to be vigilant if they receive emails saying they are due a tax refund.

According to the Revenue, there has been a 300% increase in ‘phishing’ emails over the past 12 months. These generally provide a link to a replica HMRC website where recipients are asked to provide details of their debit or credit card. Criminals then use the information for identity and financial theft.

Last month, HMRC received reports of nearly 24,000 of these fraudulent emails and it is helping to close down about 100 fake websites every month.

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Image: Jail cell painting by ABN2

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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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