HMRC

Two property developer brothers have been sentenced for stealing more than £3.2 million in an offshore tax scam.

Stephen Hirst, 62, and his brother Michael, 55, both from Yorkshire, used offshore companies in overseas territories to hide money from the sale of land in Wakefield to evade paying tax.

Tax fraud cases in the UK rose 49%, reaching 94 in 2022/23, as HMRC intensifies crackdown

The number of criminal cases brought for tax fraud in the UK has surged by 49% in the last year, increasing from 63 proceedings in 2021/22 to 94 in 2022/23, according to multinational law firm Pinsent Masons. This rise reflects HMRC's intensified efforts to combat tax crime.

The political parties have stated their plans to clamp down on taxing the wealth and setting in place extra regulations to stop tax avoidance. But why does this need to happen, how common is tax avoidance in the UK?

Tax Avoidance and Evasion Statistics

There is a £4.6 billion tax gap which is due to tax avoidance meaning that taxes are lower what they should be from people and corporations committing tax fraud and avoidance.

Around £70billion of revenue has been lost to tax evasion overall in the UK

Midlands Trading Ltd was established in 2014. HMRC first became suspicious in 2015 during an unannounced inspection at their factory on Benson Street, Spinney Hills, Leicester.

Hifzurrehman and Ehsan-Ul-Haque Patel, directors of a Leicester textile company, have been jailed for setting up fake sub-contractors to evade £1.3 million in tax.

https://www.easterneye.biz/leicester-textile-company-directors-jailed/

The High Court has ruled in Upham and others v HSBC UK Bank Plc [2024] EWHC 849 that HSBC did not deceive hundreds of investors in a £1.3 billion fraud claim. The claim alleged that the bank had misled investors into financing a Disney movie tax relief scheme, later judged by HMRC as tax avoidance.

https://www.linklaters.com/en/insights/blogs/bankinglitigationlinks/2024/may/high-court-rules-hsbc-not-liable-in-fraud-claim-for-disney-film-financing-tax-scheme

The directors of a Leicester clothing company that supplied well known high street and online retailers have been jailed for a £1.3 million tax fraud.

Hifzurrehman Patel, 40, and Ehsan-Ul-Haque Dawood Patel, 46, set up a sophisticated network of front companies to evade VAT between 2014 and 2017.

The mastermind behind a seven-strong gang who set up 90 bogus companies to steal more than £800,000 in a VAT and car finance fraud has been jailed for six years.

Derby man Shahid Mohammad led the gang in the fraud which included a fake recruitment firm to steal identities. His co-defendants were handed suspended prison sentences.

A group that established 90 fraudulent companies has received sentences totalling more than 10 years.

Derby resident Shahid Mohammad led the group, creating front companies including a fake recruitment firm, in an attempt to steal over £800k through VAT and car finance scams.

Tax Policy Associates (TPA) has drawn attention to a form of VAT fraud which exploits companies which routinely receive VAT refunds. Fraudsters operate the scheme by submitting a paper form VAT484 (which is used to notify HMRC of changes to a VAT-registered business’s contact, bank or VAT return date details) purportedly on behalf of the company, changing the company’s bank details. HMRC process the form and issue the refund direct to the fraudulent bank account. TPA reports that this has already affected at least three FTSE 100 companies and an unknown number of smaller businesses.

https://www.taxjournal.com/articles/vat-refund-fraud-targets-businesses

Two brothers have been jailed after trying to steal £1m in a film tax fraud operation.

Craig Rees, 50 and Carl Rees, 52, from Warwickshire submitted inflated or “completely made up” tax relief claims to HM Revenue and Customs, the authority said.