Eleven members of a gang who carried out a £4m VAT fraud have been sentenced following an HMRC investigation which resulted from checks on a number of companies involved in the building trade across the North West of England say Harris & Co accountants Northampton who deal with the VAT affairs of many small and medium sized businesses.
HMRC’s enquiries discovered that many of the companies were linked - regularly providing services to each other and using the same accountant. They also used the same invoices, receipts and accounts figures to make sizeable claims for VAT refunds.
HMRC identified 23 companies involved in a chain which had traded for approximately 18 months in an attempt to bring £4,328,386 in fraudulent VAT claims. Most of the companies had never carried out any building work or traded legitimately during that period.
The gang offered people up to £35,000 to act as puppet directors and allow the gang to use their names and addresses to set up the bogus companies. They also issued fake invoices and receipts from some of the UK’s leading building suppliers, none of whom had ever dealt with or heard of the companies run by the gang, as well as bogus building contracts for housing developments including a £3.5m development in the West Midlands.
Jo Tyler, HMRC assistant director, criminal investigation, said: ‘The gang ran the fraud from premises in Preston and then filtered the money through company bank accounts with large sums of cash shared out between those involved or transferred abroad. This was a deliberate attack on the UK VAT system to fund criminal lifestyles.’