TaxCorporate TaxCharity tax probes create late filing chaos

Charity tax probes create late filing chaos

Four companies under investigation by HM Revenue & Customs have been suspended from the Channel Islands Stock Exchange after filing their accounts late

The companies have not been able to file their figures due to the taxman’s
seizure of papers last year as part of a investigation into charity tax schemes,
senior figures at the companies told Accountancy Age.

The auditor for all four companies has also resigned due to the dramatically
shortened timeframe required to file the papers.

Clerkenwell Medical Research, Modia, Your Health International and Signet
Health International have all been suspended from the exchange for the late
filing of various sets of accounts. All are involved in probes over charity tax
rebates.
Clerkenwell and Modia have not filed interim or annual audited accounts, and
Your Health and Signet have not filed interim accounts.

Clerkenwell and Modia are also late in filing their accounts to Companies
House, following the tax probe into the companies.

HMRC is currently probing the
use of companies to generate charity tax rebates. Companies with intellectual
property are floated as part of the schemes, and the value of the companies
hugely inflated. The shares are gifted to charity and attract huge rebates.

Several of the executives at the companies were also advisers at Vantis,
which has become embroiled in the probes and advised clients on investing in
them. The firm said that the companies had genuine commercial prospects and were
not cash shells, and that tax rules had been strictly applied.

David Yeoward, the chief operating officer for all four companies, said this
week: ‘The Revenue took away a lot of our papers. We have got them back now, and
are working on them as we speak. I can’t tell you how disruptive this has been.’

Stock exchange filings indicate that the companies hope to file by 15 February.
The accounts are expected to give a fuller indication of the companies’
activities.

Auditors Frith & Co resigned last month, and KLSA was appointed in their
place.
Yeoward said: ‘Essentially, the previous auditor is a small firm and can only do
the work if everything is supplied to a pre-agreed timetable. It wasn’t able to
drop everything so we have appointed a larger firm.’

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