£470k VAT Fraud Sends Leeds Man to Prison

20 September 2018, 17:26

Most people would love to have £470,000 to spend on homes, cars, and other luxuries in life. Shaun Clark of Tingley, West Yorkshire had access to that exact amount of cash and decided to spend it on houses, a holiday home, and several cars. However, the money was not his to spend, as a statement from HMRC has confirmed.

Mr Clark has just been sent to prison for 27 months for his part in the fraud. He ran two recruitment businesses from one address in Wakefield. Between May 2014 and July 2016, he kept VAT payments amounting to £470,867 rather than forwarding them to HMRC as he should have done.

Mr Clark admitted the fraud when investigated by HMRC. They became suspicious of his activities when he tried registering a third business from the same address used by the other two. One of the two existing businesses continually charged customers VAT yet had never submitted a VAT return. The second business last submitted a return in April 2014, while continuing to charge VAT on payments from that point.

To further muddy the waters, it turned out Mr Clark had been disqualified from running a business for a five-year period dating back to 2009. He has now been banned for a further eight years, having admitted to running a business during the disqualification period. 

The assistant director for the Fraud Investigation Service at HMRC, Sandra Smith, noted that the money he stole was enough “to pay the salaries for 21 newly qualified nurses for a year.” Having been sentenced to 27 months in prison on 14th September 2018, there is little chance of Mr Clark defrauding people for the foreseeable future. HMRC is now looking to recover the money stolen by Mr Clark during his VAT fraud.

A couple of questions linger from this occurrence. Firstly, he was running a business while disqualified, yet has been disqualified again for the same reason. Will this latest disqualification be any deterrent? Clearly, while he is in prison he cannot run a business, but one wonders whether he would be tempted to do so once again when he is released.

Secondly, while he was given 27 months in prison, the chances are he will serve less than this and be out again in a much shorter time. It’s also worth wondering how much of the lost VAT payments will be recovered. With properties and a holiday home to show for his efforts, it is hoped a good amount of the money could be recovered. That isn’t always the case in situations like this.

HMRC likes to promote the convictions of those who try to evade the payment of VAT. One wonders how Mr Clark thought he might get away with it. Perhaps over the course of two years, he believed he would.