You might think VAT fraud doesn’t happen that often. It’s fair to say most people are honest and don’t try to defraud HMRC over their VAT payments. However there seems to have been a collection of stories recently relating to people who tried to get away with it and got caught.
Take the story of the district councillor from Keighley for example, who was jailed for unlawfully claiming tax and VAT payments on several businesses he had set up. These businesses actually put very little work through their books.
In another case reported just before Christmas, a farmer living in Tornaveen in Scotland was sent to prison for a VAT fraud that amounted to an incredible £650,000. The fraud was carried out over more than six years and according to the details of the case, the farmer was unduly influenced by another party.
You don’t have to look too far to find other examples of people who tried to get away with VAT fraud either. Two men who operated Pizza Hut takeaways managed to get away without paying nearly £600,000 in VAT payments and have since gone to prison for doing so.
There are many reasons why people try to cheat the system, but HMRC seems to be getting better at discovering these frauds. Either that or we are simply reading more about the cases that come to light. There will always be people who try to get away with making or saving money in unscrupulous ways, and cheating HMRC is one of the ways it can happen.
While several of the cases above have taken place over some years, it is clear that they were eventually discovered. Many other cases don’t hit the headlines and you can be sure others are being investigated even as you read this. The bigger cases that do tend to make the news will usually involve five or six figure sums, as is the case above.
Many people who run businesses get nervous about registering for VAT and staying within the rules and regulations imposed on them. However there is plenty of advice and help available if and when you need it. People do make mistakes but this is very different from deliberately trying to pull the wool over the eyes of the watching inspectors at HMRC. We will always hear stories about people who tried and failed to cheat the system, and we’ll always read stories about the lengthy prison sentences that can result.
In short, the consequences of trying to defraud HMRC are clear to see. It is shocking to see how long some of these scams go on for before the guilty parties are caught – but at least the right result is reached eventually. Fingers crossed it stays that way.