Businessmen jailed for hiding £500,000 in offshore accounts

Businessmen jailed for hiding £500,000 in offshore accounts

Two businessmen face jail terms after evading £500,000 in income tax over a six-year period

TWO BUSINESSMEN have been jailed for tax evasion and fraud after hiding £500,000 offshore bank accounts.

Roderick Smith and Steven Howarth had the opportunity to disclose their offshore accounts through HM Revenue & Customs’ Offshore Facility (ODF) in 2007. Smith only disclosed one of the 12 accounts he controlled overseas – his actions were compounded by failing to inform his accountant. Howarth did not register for the ODF.

The men, who ran Goldlogic Control Systems, a company offering computer technology to the automotive industry and had many of their clients based in Germany, did not register their true level of sales with HMRC, placing their profits in bank accounts in the Isle of Man.

After alerts from the German tax authorities, HMRC investigators found that the men evaded around £500,000 in UK income tax over a six-year period.

HMRC’s assistant director of criminal investigation Mike Preston said that Smith and Howarth stole from UK taxpayers, using the money that should have paid for public services to fund luxury lifestyles filled with “prestige cars and expensive holidays”. Failure to declare the true levels of sales in Europe and pay tax due on these earnings means both men must now “face the consequences” of their actions in jail.

He added: “HMRC is clamping down on tax evasion and targeting UK tax payers using offshore accounts to disguise their wealth.”

HMRC identified sales totalling £1,255,615 in Germany, while only £49,650 of this money in sales for the same period was declared by the men. The balance was divided into offshore accounts of five shell companies registered in Mauritius and the Isle of Man, created solely for the purpose of tax fraud.

Smith was jailed for 15 months and Howarth for 12 months. Confiscation orders were issued under Proceeds of Crime legislation in respect of Smith for £300,000 and Howarth for £200,000. These must be paid within 24 months or the men will be jailed for a further 15 and 12 months respectively.

Judge Warnock, in summing up, said the men “cheated the Revenue, and therefore this country, by evasion of income tax”, adding that the crimes were motivated by “greed and selfishness”.

“Only sentences of imprisonment are appropriate in respect of the offences you have committed. To suspend these sentences would offend any reasonable sense of justice on the part of the honest taxpayer.”

Court costs of £5,000 must be paid by both men. Smith has already paid £40,000 under the OFD scheme.

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata
Professional Services

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine
Accounting Firms

Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021
Making Tax Digital

Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource