The reason we are writing about this particular HMRC case which has recently hit the news is that it bears a striking resemblance to a case we have ourselves recently completed ourselves, albeit with much more promising results.
June Nelson, sole director of employment agency Trojun Ltd, has been hit with a fine totalling over £37,000 and her company has received a fine of £28,000. Carlisle Magistrates’ Court heard that Nelson was required by HM Revenue and Customs to provide security for VAT when she set up her company in May 2008. The reason for the requirement was that HMRC had noticed that two previous companies of which Nelson was a director of, Trojun Services Ltd and Trojun Services (Cumbria) Ltd, had both collapsed owing £137,000 in VAT. As a result of this Trojun Ltd was forbidden from providing taxable supplies unless security of £87,000 (or security of £58,000 and monthly VAT returns) was received. However, Nelson failed to comply with HMRC’s necessary demands but felt it wise to charge VAT anyway.
When HMRC officers visited the company in February of this year they took away evidence showing sales figures of £541,000, including £72,000 VAT, covering a period of 15 months. Both Nelson and the company were charged with offences relating to the non-payment of VAT and after pleading guilty at a previous hearing in September, Nelson was sentenced in her absence on Friday 8th October.
HMRC assistant director, Peter Hollier, said:-
“In the current economic climate it is vital that we help and support businesses with their tax liabilities; but it is only fair to them that we also pursue relentlessly those who bend and break the rules.
HMRC always encourage businesses who find themselves in financial difficulty to contact us to discuss their tax obligations; it is not acceptable to simply not pay your tax.”
One of our VAT experts at KinsellaTax wrapped up an almost identical case very recently. Our clients had also failed to provide a required security to HMRC and as such found themselves the subject of a criminal investigation by HMRC. Luckily, due to the extensive knowledge and sharp minds of our tax investigation experts, the criminal investigation was dropped quickly and no longer pursued. Our clients had a fortunate result and just goes to show that if you are under investigation by HMRC, whether criminal or civil, there is always something KinsellaTax can do.
Don’t risk missing out on our expert services.
Call us on 0800 471 4546 before it is too late and you end up with a hefty fine and a criminal conviction.