HMRC late issuing statements

HMRC have advised that there are apparently more Self Assessment statements than usual to issue this year. Normally these would be issued in July but this year some will be issued later. The majority of statements have been sent on time. However, many taxpayers wait for the statement to confirm what they need to pay. More importantly, if HMRC have asked taxpayers to make a second payment on account in July, they normally have to pay this by 31 July. However, due the delays in issuing some statements HMRC have advised: ‘If you receive your statement in August, you should still pay the tax due as soon as you can. You’ll only be asked to pay interest on the tax due on the second payment on account if you still haven’t paid it more than 30 days after you receive your statement.’ If you have any concerns regarding payment please do get in touch.

Friday Funny

We have 2 work experience students with us this week, and I have just asked one of them to find me a video, related to accountancy or dentistry, to blog to you all.  She did succeed, but in the process, found this little beauty that was so great, I thought I’d share this instead

Have a great weekend!

http://youtu.be/-fVDGu82FeQ

Fake haulier jailed for VAT fraud

HMRC investigation into £600,000 spare bedroom scam

Pat Sweet

A Leeds man who fraudulently claimed £600,000 in VAT repayments for a fake haulage company has been jailed for four years following an investigation by HM Revenue & Customs.

James Harrison, who was declared bankrupt in 2005, registered his business ‘Express Haulage’ in 2007. Working from his spare bedroom, between 2007 and 2010 he created fake invoices, haulage paperwork, insurance documents and fuel receipts in order to make it look as though his company was trading as a legitimate haulier.

He claimed to have purchased 30 new haulage vehicles, spending around £211,000 on fuel for his business, when in fact his company did not even have a haulage licence. Harrison obtained fake registrations for his ‘vehicles’ by driving past a well-known haulage supplier on the first day of new vehicle registrations and jotting down the registration numbers of the vehicles as they were unloaded.

Harrison’s activities continued between October 2009 and January 2010 while he was in prison for an unrelated offence. The offences were uncovered after he submitted false VAT returns that would have entitled his ‘company’ to £604,179 in VAT repayments and made plans to expand and create a further company.

HMRC spokesman Martin McDonnell said: ‘Harrison set up his company with the sole aim of committing fraud. He brazenly defrauded taxpayers out of hundreds of thousands of pounds so that he could live the high life without having to work for it.’

HMRC officers discovered that Harrison had spent more than £430,000 over the last few years on luxury cars, caravans, business class airline tickets and gambling, whilst also continuing to claim jobseekers allowance.

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End of a hard week

It’s Friday, and it’s the end of a long week, during which I had my appraisal.  It’s also the 10th Anniversary of The Office, starring Ricky Gervaise as David Brent, possibly the most odious manager ever to walk the earth.

I thought I’d lighten the weekend – enjoy this clip!

 

Plumbers’ amnesty raises £328,000

HMRC planning ‘thousands’ of enquiries

Pat Sweet

HM Revenue & Customs has announced that around 600 people have come forward as part of its tax amnesty for plumbers, which has raised £328,000 from voluntary disclosures.

The Plumbers Tax Safe Plan was launched in March this year and was designed to allow taxpayers to declare past tax irregularities in return for a reduced penalty. HMRC wrote to 50,000 tradespeople warning them that once the deadline passed, a fresh clampdown would take place which could result in the full penalty being imposed in tax evaders.

The scheme ended on 31 March, and HMRC figures show that it resulted in £94,000 being collected and a further £234,000 offered in unpaid tax.

HMRC has said that it will now begin enquiries into 500 people as a result of the amnesty, and that this will be followed by ‘thousands’ more.

Gary Ashford, head of tax investigations for RSM Tenon, said: ‘This is a disappointing result for HMRC. Given the low turnout I would expect HMRC to swoop quickly. I would also expect to see HMRC pursue a combination of civil and criminal investigations.’

HMRC extend ‘tax cheats’ campaigns

 

HMRC have announced that they will be launching new campaigns over the next year targeting VAT defaulters, private tutors and e-marketplaces.

HMRC will use more IT, such as ‘web robot’ software, to search the internet and find targeted information about specified people and companies. Using the software, HMRC feel that they can pinpoint more accurately people who have failed to pay the right tax. The software, used with HMRC’s Connect computer system, also helps find people who are trading without telling HMRC.

The Connect computer system alerts HMRC to previously invisible tax evasion by matching a vast amount of HMRC and third-party data. It can identify previously hidden relationships, uncovering anomalies between such elements as bank interest, property income and lifestyle indicators before homing in on unexplained inconsistencies.

HMRC announced last month that a campaign targeting VAT rule-breakers trading above the £73,000 turnover threshold but who have not registered for VAT will be launched in the summer.

Other campaigns to be launched in 2011/12 will focus on:

• those who provide private tuition and coaching
• e-marketplaces, which buy and sell goods as a trade or business
• trades, which will build on HMRC’s plumbers’ campaign and give an opportunity to another group of ‘tradespeople’ to declare unpaid tax.

Mike Wells, HMRC’s Director of Risk and Intelligence, said:

‘We want to make sure HMRC listens to as many informed views as possible for our future campaigns. We want the views and experience of people and organisations outside the department to play a fuller part in the campaigns that we design for customers.’

‘By being open about our areas of interest for the coming year we hope to maximise that exchange of information and ensure we reduce the tax gap and help customers pay what they owe.’

‘We will use the information we gather to pursue people who choose not to use the opportunities we provide for them to put their affairs in order on the best possible terms. It will be more expensive if we come and find people, so I urge them to come forward and disclose voluntarily.’

Accountant convicted for £356m Langbar fraud

 

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Posted by John Stokdyk in In business on Mon, 27/06/2011 – 13:15

Accountant and former Langbar CEO Stuart Pearson was jailed last month for falsely claiming that his company had £356m in assets with Banco do Brasil.

A chartered accountant and former Baker Tilly partner, Pearson was sentenced to 12 months in jail for his part in the fraud and disqualified from being a company director for five years.  He was acquitted on 10 other counts of making a misleading statement, contrary to s397 of the Financial Services and Markets Act 2000.

A confiscation hearing will take place on 1 August. No other individuals have been charged in connection with the investment fraud, which came to light in 2005. The company’s legal adviser, Nabarro Wells, was fined £250,000 for due diligence failures in 2007.

Pearson’s crime was to have issued regulatory statements and told analysts the company had assets with Baco do Brasil after officials at a Spanish bank had notified his company that the certificate it used to back the claims was false.

“His background meant that he would have been fully cognisant with the strict requirements and standards demanded of companies publishing information to the market,” the Serious Fraud Office commented in an official statement on the case.

Previously known as Crown Corp, the company was formed in Bermuda in June 2003 and gained a listing on London’s Alternative Investment Market. It issued a series of announcements detailing profitable contract wins, but didn’t really attract the attention of investors until 2005 it backed into Pearson’s company Langbar, took on its name and appointed the accountant as CEO.

In a lengthy analysis, The Guardian characterised Pearson as “little more than a patsy” for the shadowy investors who constructed the phantom investment vehicle.

In 2005 Pearson travelled to Brazil with Avi Arad, chief of Langbar’s primary investor, Lambert International Finance of Delaware. When he got to São Paulo, Pearson was told that because of a bomb scare at Banco do Brasil’s office his meeting with one of the bank’s lawyers would take place elsewhere. The venue turned out to be a notorious fraud hotspot and both the lawyer and the document he signed were bogus.

As the deception unraveled, Pearson was forced to suspend trading in the company’s shares in October 2005 and call in forensic investigators from Kroll. As the SFO put it, Lambert Financial Investments had over 41 million CCL shares at 5 Euros each, it had issued a certificate of deposit which was false and worthless (and the principal directors knew this). CCL had no money and its shares no real value. “Despite this, CCL continued to make public statements to the market about its value based on the bogus certificate.”

While the accountant was convicted, the principal authors of the Langbar fraud are still at large and millions of pounds raised from private and institutional investors including including Gartmore, and Merrill Lynch have not been traced.

VAT golf judgment swings against HMRC

Tax tribunal rules non-member green fees are exempt

Pat Sweet

13 June 2011

HM Revenue & Customs has lost a tax tribunal case over whether VAT is chargeable on the fees paid by non-members to use the course at golf clubs.

Supplies to members of a golf club have been exempt from VAT since 1990, but HMRC has always taken the view that ‘green fees’ payable by non-members should be subject to VAT at the standard rate.

However, the First Tier Tax Tribunal judgment in the case of Bridport & West Dorset Golf Club has ruled against HMRC. It said that the provision of facilities to play should have the same VAT treatment irrespective of whether the person playing paid an annual membership subscription or was a visitor to the club paying a ‘one off’ green fee.

As a result, the charges made to both full and temporary members are exempt from VAT.

Lorraine Parkin, head of indirect tax at Grant Thornton said: ‘This is a significant decision because it was the lead case on this issue, and hundreds of claims are said to have been lodged with HMRC by members’ golf clubs in the UK. It means that guest players at such courses will no longer have to pay VAT to play.’

HMRC has 56 days to appeal against the decision to the Upper Tribunal

At the end of a hard week

Some of you may remember I posted a Monty Python sketch about Chartered Accountants recently.  Well, in the finest spirit of Friday Funnies – I’ve had a look for something to make you laugh this afternoon – and this comedy moment hove into view.  Enjoy, and have a good weekend!

HMRC tax amnesties raise £500m

Sixteen criminal investigations in progress

Pat Sweet

10 June 2011

HM Revenue & Customs has launched 16 criminal investigations as a result of its recent set of tax amnesties aimed at specific categories of taxpayer.

According to the Daily Telegraph, HMRC has pulled in nearly £500m in unpaid tax following over 50,000 voluntary disclosures from taxpayers making use of the Offshore Disclosure Facility and New Disclosure Opportunity, as well as the recent scheme aimed at plumbers and heating engineers.

In addition, the Tax Health Plan, which was aimed at medical professionals, produced a further 1,500 voluntary disclosures.

The paper says HMRC is investigating a further 3,000 leads on top of the criminal investigations.

Gary Ashford, head of tax investigations at RSM Tenon said: ‘HMRC is sticking to its word to try and deliver a five-fold increase in prosecutions by opening these criminal investigations, and this is a clear indication that they are stepping up their fight against tax evasion and non-compliance.’