John Foggon of 255 Worsley Road, Swinton, Manchester, was made subject to a confiscation order of Pounds 1,068m at Manchester Crown court last week Friday. The order was unprecedented in that it reflected the total amount that Foggon had benefited from rather than simply the amount of tax and interest evaded.
The confiscation order against Foggon was more than double the tax and interests charges the Revenue lost out on, which amounted to Pounds 450,398.
Foggon had previously pleaded guilty to defrauding the Inland Revenue over a number of years by diverting in excess of Pounds 1m of company money into a hidden bank account.
The former chairman of Worsley-based cleaning machine supplier and servicer Vaclensa was jailed for two years in May after being found guilty of tax fraud by a Manchester Crown court.
If he does not pay the money he will serve a further six years in prison.
In response to the court decision, the Revenue said it was duty of anyone who operates a bank account in a similar way to Foggon or understates profits or income by any other means, to make an early and full disclosure of this.
Taxpayers that do make such a disclosure should expect to pay tax, interest and penalties on the money they have not previously disclosed.
But if they wait to be prosecuted, they risk not only a prison sentence but also confiscation of all the money or other benefits they made from the tax evasion.
Report argues that the government must change the way it makes tax and budget decisions
Drastically fewer offices for HMRC in the hope to reduce their running costs
Tayabali Tomlin and d&t directors launch £20 a month TaxGo service, aiming to be the 'biggest UK firm' by client numbers
Companies must report on their complex financial structures including offshore accounts and notify HMRC