HM Revenue and Customs recently concluded a two-year long investigation into the fraudulent withholding of tax, National Insurance Contributions and CIS deductions carried out by two business men and an employee of a construction company in Kent.
Accountant Aquil Ahmed, client Victor Shearer, and payroll administrator Christopher Azzopardi, were sentenced on three counts of conspiracy to commit fraud. The trio operated an intricate web of offshore and UK-based companies and bank accounts through which they invoiced clients for their workers’ wages, income tax and VAT but then failed to pass the tax deductions over to HMRC.
From 2010 to 2012 Ahmed’s umbrella companies withheld £6.9m in PAYE, National Insurance Contributions, CIS deductions and VAT. The money was then laundered through a series of bank accounts set up for the purpose in Gibraltar and Belize. Following that, it was transferred to a web of bank accounts worldwide in countries including Switzerland, South Africa and Dubai. The proceeds were shared out between all three parties.
The scale and complexity of the case meant that it took HMRC nearly two years to investigate. Chris Gill, Assistant Director of the Fraud Investigation Service at HMRC said: “HMRC uncovered this complex and sophisticated fraud, operated through a multitude of UK and offshore companies. The fraudsters abused the tax system which is designed to ensure workers are paid correctly, and taxes are paid to HMRC. This investigation shows that regardless of the resources of those involved, no one is beyond our reach.”
It is cases such as these which highlight the importance of choosing a reputable payroll provider. Clients looking for a payroll bureau must remember the old adage: if it sounds too good to be true, it probably is". Be wary when payroll companies offer you "massive savings" or are even offering you cashback. First Payroll customers can rest assured that with our long history and honest, straightforward fees, that we provide a good value and totally transparent service that you can trust. If your current (or a prospective) provider is offering to run your payroll "for free" or is promising "sweeteners" or cash back, think carefully about where that money is coming from. If you have any concerns, we urge you to give us a call on 0333 666 1510