TaxAdministrationFinancial advisers convicted in £2m VAT scam

Financial advisers convicted in £2m VAT scam

Fake companies set up to trade in zero-rated goods reclaimed VAT on false business expenses

Three financial advisers from north-west England have been jailed for their
involvement in a £2m VAT scam.

Gary Edgington, 55, Peter Wood, 52, and 70-year-old Michael North were each
handed down prison sentences ranging from 15 months to four years and eight
months, following an investigation by HMRC. The three were part of a group of
eight who were convicted yesterday. Three more individuals are awaiting
judgement for their part in the fraud.

The case involved phony companies registered between 1998 and 2004, claiming
to trade in zero-rated VAT goods such as fruit and vegetables, children’s
clothing and animal feed. Sales transactions in these goods were falsified while
business expenses for the “companies” were also created. In this way, the
fraudsters evaded VAT on the made-up sales but the VAT on the made-up business
expenses was reclaimed from HMRC.

The total amount of VAT defrauded came to around £1.9m, which the gang used
to fund lavish lifestyles and purchase properties. The three financial advisers
had opened bank accounts to receive the money for other gang members.

Mike O’Grady, HMRC’s assistant director criminal investigations North West,
said in a statement: “They abused their positions of trust to line their own
pockets and those of their co-conspirators and the sentences handed out by the
court today reflect how seriously this crime is taken.

“VAT fraud is a serious crime which diverts vital income from the UK’s public
services into the pockets of career criminals and HMRC will do everything in its
power to put a stop to this.”

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