Tax Investigation Archives - Churchill Tax Advisers

Churchill Tax Advisers swiftly close a large tax investigation

Nov 30, 2020 | Tax Investigation | 0 comments

This was a client from London that was being investigated by HMRC.  The client had acquired a number of investment properties over the recent years. HMRC’s main concern was how the acquisitions were financed considering the client’s regular income not being sufficient to justify this. In addition HMRC were looking into the client’s rental income and expenditure. The client had received large sums of cash as inheritance from his parents based abroad but there was no audit trail of the monies being transferred. At one stage, our client was even ready to pay tax to HMRC as he felt that his case was not strong enough and the monies inherited could not be proven. There were a few expenses that our client had not claimed that could have been claimed. We dealt with HMRC using our experience and knowledge of HMRC’s practices and put forward strong arguments and alternate sources of evidence defending our client’s position. Eventually after three exchanges of letters HMRC proposed that they were willing to close the enquiry without any adjustments if our client chose not to claim the unclaimed expenses. Our client was happy to accept this proposal and the investigation was closed with no tax to pay. We are grateful to the HMRC inspector for his cooperation and adopting a positive approach towards our client’s circumstances.

Our analysis: This client came to us as soon as he received the letter from HMRC opening an enquiry. As there had been no prior involvement by another accountant, we were able to close this investigation swiftly. This is in contrast with cases where individuals tend to go to the cheapest accountant in the market to seek help which makes matters worse. These taxpayers eventually end up paying a lot more in taxes and fees as they eventually realize they need to appoint a tax specialist firm to represent them.

Former Owner Of BHS Has Been Jailed For 6 Years For Tax Fraud

Nov 6, 2020 | HMRC, Tax Investigation | 0 comments

The former owner of BHS, Dominic Chappell, has been sentenced to 6 years in prison for tax evasion.

He was found guilty by a jury at Southwark Crown Court of failing to pay tax on £2.2 million of income totalling £584,000 after buying BHS for £1.

Chappell, 53, enjoyed a lavish lifestyle buying yachts, a Bentley car and luxury holidays.

BHS had a pension problem in 2015 that left Chappell “utterly broke”, claimed his lawyer.

Mr Chappell had bought the BHS franchise from Sir Phillip Green that year but the chain collapsed a year later which led to the loss of 11,000 jobs and a pension deficit of £571 million.

BHS Problems

Chappell’s consortium, Retail Acquisitions, bought BHS in 2015 but they was losing £1 million per week with masive pension deficits.

In his year of ownership Mr Chappell received £2.5m in payments from BHS , largely for consultancy fees provided by another of his companies, the bankrupt finance firm Swiss Rock Limited.

Sir Philip Green later agreed a £363 million cash settlement, after being criticised for agreeing to the deal, for the Pensions Regulator to plug the gap in the pension scheme.

The HMRC repeatedly tried to chase down the missing funds, but Chappell ignored their requests, at one point going on a skiing break before asking for more time to pay the money when he returned home.

In his defence, Chappell argued he was too busy resolving issues with BHS to deal with the outstanding taxes that were due.

He had denied three charges of tax fraud.

Chappell was ordered to pay £9.5m into BHS pension schemes this year, after losing an appeal.

And in 2019 the Government’s Insolvency Service banned him from running a company for 10 years, saying he had carried out “reckless financial transactions” and “failed to maintain adequate company records”.

Churchill Tax Successfully Defend Client Against Insolvency Service

Sep 29, 2020 | Tax Investigation | 0 comments

Churchill Tax Advisers have recently assisted our client in defending himself against the Insolvency Service who were seeking his disqualification as a director. Working with the client we were able to demonstrate that his behaviour, which had been considered detrimental to the public good by the Insolvency Service, was actually that of a businessman seeking to save his company as the retail market he operated in changed due to Brexit and the tough economic conditions that many areas have experienced. We were able to show that his own losses from the winding up of his business were as great as those of others. The Insolvency Service when presented with all the circumstances took the decision to take no further action.

Churchill Tax’s Advice Saves Company Penalties

Sep 29, 2020 | Tax Investigation, Uncategorized | 0 comments

Churchill Tax Advisers have successfully assisted a medical clinic that had been under investigation regarding the exemption of its supplies. HMRC believed that the supplies being made were taxable at the STANDARD RATE. Working with our client we were able to demonstrate that the client’s work fell completely within the medical exemption as set out in the VAT legislation. We were also able to bring to HMRC’s attention, changes in case law which also favourably demonstrated our client’s position. The outcome was that our client maintained its system of charging and did not become twenty per cent more expensive in delivering its services.

Restaurant Owner Faces 7-years Behind Bars Or Pay £1.2million

Sep 25, 2020 | HMRC, Tax Investigation, VAT Fraud | 0 comments

A restaurant owner who laundered cash stolen by his VAT fraudster wife has been told he could face an extra seven-and-a-half years in jail if he does not pay £1.2 million.

Yong Hong Lu, 52, of Farnham, Surrey, was jailed for two years last May after HMRC investigation found he had laundered more than £1m.

His wife Huey Jun Khoo, 51, and business partner Jing Fu, 50, of Crondall, Hampshire, were sentenced for VAT fraud in May 2019, after they was found guilty of using an off-the-books card machine to pocket £180,000 in VAT.

Lu and Khoo used the stolen money from their four-year fraud to pay for designer clothes, holidays and school-fees.

Lu was jailed for two years, Khoo was jailed for three years and 9 months, and Fu was sentenced to seven months imprisonment, suspended for two years.

Lu must pay £1.2m within three months or face seven-and-a-half years longer in jail. Fu has three months to pay £50,000 and Khoo has been ordered to pay £15,000 within three months. If they fail to do so, they will be jailed for nine months respectively and still owe the money.

The VAT fraud and money laundering was discovered after a surprise visit from HMRC at the Bon East Chinese restaurant in 2015. Officers found two card reading machines – one linked to a business bank account and the other to a bank account which Khoo had opened in the name of one of the restaurant’s chefs.

Customer payments made into the ‘chef’ account were never declared to HMRC, to evade paying VAT.

After the HMRC visit, Khoo and Fu destroyed the business records in a failed bid to hide their crimes. Two documents which Khoo kept were later discovered at her home. Investigators also found £12,000 in cash hidden in a wardrobe in the couple’s home.

Khoo admitted evading VAT, money laundering and perverting the course of justice. Fu, admitted money laundering and perverting the course of justice. Lu was convicted of money laundering after a trial at Southwark Crown Court.

A Suspected Furlough Fraud Of £495,000 From A West Midlands Man

Jul 28, 2020 | HMRC, Tax Investigation | 0 comments

A West Midlands man has been arrested as part of an HMRC investigation into a suspected £495,000 Coronavirus Job Retention Scheme (CJRS) fraud.

HMRC officers executed a search warrant on 8th July and arrested the 57-year-old I the Solihull area. This is the first arrest in connection to alleged fraud relating to CJRS.

Computers and digital devices were seized, and funds held in a bank account relating to his business have been frozen.

More than £27.4 billion has been claimed through the Job Retention Scheme supporting 1.1m employers and 9.4m furloughed jobs.

The four lines of defence the CJRS scheme has are:

Employees have to have been on a payroll on or before 19 March – preventing the use of fake employees
Claims are only accepted from employers known – and authenticated – by HMRC
All claims are assessed by a specialist team within a 72-hour window
Proportionate and reasonable interventions with customers after money has been paid.

Eight more men from across the West Midlands have also been arrested as part of this linked investigation. Further computers and other digital devices were seized, plus business and personal records.

« Older Entries