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Chapter CH282220

Document Cited in Related
Vincent
Published date11 March 2016
Record NumberCH282220
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

Example 1

Mrs B, was the sole director of Spitari Limited and Spitari (at Wembley) Limited, operating Chinese restaurants in London and on the South Coast.

Each company had an annual turnover in excess of £1 million. However, they were registered falsely with HMRC, describing them as arts-based businesses with estimated annual turnovers of £10,000 and £80,000.

Mrs B failed to file VAT returns for either company, which caused HMRC to raise assessments on the companies’ under-declared estimated annual turnovers. The assessments raised were therefore for minimal amounts – sometimes only for hundreds of pounds -which the company paid. This meant over £1 million in tax went unpaid over a four-and-a-half year period.

An HMRC investigation uncovered the fraud, and the restaurants ceased to trade soon after with both entering liquidation. As a result of Mrs B’s involvement, she signed a director’s disqualification undertaking for a period of 12 years in relation to her misconduct.

Example 2

Mr K was the sole director of BMX Construction Limited, a construction company based in the West Midlands.

HMRC made unannounced visits to the company and found that it had under-declared its VAT liabilities by failing to disclose all its sales. In addition, the company failed to operate PAYE correctly by failing to register all eligible employees.

Furthermore, an additional bank account was identified in which sales income was deposited. HMRC raised an officer’s assessment for additional VAT liabilities of £200,000 as well as applying civil penalties of £90,000 to the company.

The company later entered liquidation owing £650,000 to creditors, including at least £365,000 for VAT and £55,000 for unpaid PAYE/NIC. Following the company’s liquidation Mr K agreed to a director’s...

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