Accountants may want to be on the lookout for clients whose dealings appear to be suspect after an antique trader was found guilty of a VAT fraud.
The jewellery trader from Baldock in Hertfordshire used invoice books that had been stolen and fake invoices to reclaim more than £1.6 million worth of VAT from HMRC. However, he had not actually purchased the majority of the watches he was claiming repayments for.
Martin Brown, the assistant director of criminal investigation at the Revenue, explained that the department wanted to make sure people understand that tax fraud constitutes a serious offence. The guilty trader wanted a lavish lifestyle and thought he could fund it through his illegal activities. Despite all of his efforts to conceal the crime, HMRC investigators still managed to unravel the scam.
Investigators became suspicious when they found a number of high value cash purchases in the business records of Jonathan Uri Shohet. Some of these were for as much as £80,000 and yet when HMRC tried to cross match them with the suppliers, it turned out that some of the purchases had not taken place. Furthermore, not satisfied with reclaiming the VAT on legitimate purchases, he re-submitted invoices in the hope of getting the VAT back twice.
Officers discovered illicit invoices books when they carried out dawn raids on the jewellers business and residential premises.
Shohet was found guilty on 2 charges of cheating the Revenue and Southwark Crown Court sentenced him to 4 years in prison for each charge. The sentences will run concurrently.