A Leicestershire restaurant owner, who stole more than £180,000 by fraudulently underpaying VAT, has admitted committing tax fraud.
Mark Hammond, aged 50, from Loughborough, defrauded HM Revenue & Customs (HMRC) by failing to declare cash payments and submitting false VAT returns over a three-year period.
When HMRC’s taxation investigators visited Hammond’s restaurant – The Blacksmith Arms bar and restaurant in Barrow upon Soar, they analysed data taken from the till which confirmed cash sales had been under-declared.
The fraud investigation revealed that the businessman’s deception followed a particular pattern. He submitted fake returns for both the bar and restaurant based on card sales only, but failed to declare cash payments to evade VAT. In total, he stole £181,189 – £136,236 of unpaid VAT and £44,953 in Corporation Tax.
At Leicester Crown Court, Hammond admitted fraud and was sentenced to 20 months in prison which was suspended for two years. He was also ordered to undertake 180 hours’ unpaid work and confiscation proceedings have now begun to recover the underpaid tax.
Dr Anjulika Salhan, a Director and Head of Salhan Accountants’ taxation investigation advice team, said: As experts in tax investigations, we know from first-hand experience that restaurants and takeaways often come under scrutiny from HMRC.
“We have heard of a number of instances where tax inspectors have posed as customers in order to check how cash transactions are dealt with and whether all payments are being correctly declared within VAT returns.
“As this case illustrates, HMRC have wide-ranging powers to investigate tax breaches, with deliberate tax fraud leading to a criminal prosecution.
“Of course, only a minority of individuals intentionally set out to defraud HMRC. However, many restaurant owners may find they are under the spotlight, having unwittingly broken HMRC’s tax rules.
“At Salhan Accountants, we work extremely hard for clients subjected to a taxation investigation. We not only clarify the issues and the process, but come up with positive solutions too.”
For more information about our accountancy and VAT services, please contact us.
