Most of us have heard of The Only Way is Essex – or TOWIE, as it is called. One man who applied and failed to be on the show is now starting a five-year sentence in prison for VAT fraud.
Michael Woodward, 29, was able to get away with paying zero Corporation Tax on his company. He did this by paying his friend Richard Ponsford for consulting services that never existed in the first place. Mr Ponsford, who was also jailed, kept some of the cash Mr Woodward gave him before paying the rest back. This way of working let them reduce their tax liabilities – illegally of course. In the end the fraud amounted to nearly £6 million.
Meanwhile another man in Batley has started the first of 16-months behind bars after admitting to claiming a six-figure sum in VAT repayments from HMRC. Gary Copus ended up claiming back over £110,000 through his car dealership. He was caught in March when an investigation by HMRC revealed he had created false invoices to submit for the repayments.
So here we have three people jailed in two cases that could have seen HMRC lose a lot of money. Whether or not they will get back the VAT they lost out on through these scams is unknown. However it must surely be a deterrent to those who might be thinking of doing something similar.
Lots of businesses pay VAT and claim amounts back from HMRC through their businesses. Some believe it is an easy scam to pull by doing something similar to the people above. However as we can see here it is easier to make sure you stick to the rules and make sure you only claim back what you are entitled to.
Perhaps most surprising is the amount of money these people managed to amass in their scams, particularly in the first case. It takes time to scam such a huge amount and clearly they were found out in the end. It just goes to show many people are still discovered even after longer periods of defrauding HMRC.
Some people, as indicated by Jo Tyler from HMRC when speaking at the Batley case, believe this is easy money they can claim without worrying about any potential consequences. But as we have seen here nothing could be further from the truth. Of course most people who are registered for VAT follow all the rules and only claim back the amounts they are entitled to. While there will always be people who try their luck, there will also be investigators at HMRC who are determined to bring the perpetrators to justice – just as we have seen here this week.