Tax fraudster nicked as undies business is uncovered as fake

A tax fraudster who invented a fictitious underwear business so that he could claim back thousands in VAT, has been sentenced to two and half years in prison.

When HM Revenue & Customs (HMRC) taxation investigators decided to take a closer look at ‘D-briefed’ – which owner, Daniel King, claimed he had set up to import and sell designer men’s underwear – they found the company was a complete sham.

King, who had used the company as a front to fraudulently claim more than £57,000 in VAT, initially spun a yarn, telling taxation investigators that the company was legitimate.

He argued that he had been working hard to understand how the tax system works and had even attended a VAT seminar, before setting up the on-line business.

However, when HMRC tax inspectors pressed him for documentation to prove that he actually intended to trade, King’s story came unstitched and he finally admitted inventing figures to falsely claim VAT for non-existent merchandise over a period of three years.

Sentencing 37-year-old King, from Swansea, Mr Recorder P Griffiths QC said: “I am satisfied that you went into this with your eyes wide open and that you knew full well you were acting fraudulently. You have gained financially, dishonestly and deliberately and it would be an affront to the public if you were not immediately deprived of your liberty.”

Colin Spinks, Assistant Director of HMRC’s Fraud Investigation Service, said: “King blatantly abused the tax system by setting up a company for the sole purpose of stealing money that should have funded public services. Now he has a criminal record and we are working to recover the money he stole.”

Dr Anjulika Salhan, a director and tax investigation specialist with Salhan Accountants commented: “Cases such as this underline the fact that HMRC is becoming increasingly litigious and will not hesitate to prosecute if their taxation investigations uncover fraudulent activity.

“Although a minority of individuals intentionally set out to defraud HMRC, there are many people who find that they have unwittingly broken HMRC’s tax rules and are shocked to discover that they are under the spotlight of a tax investigation.

“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 solutions too.

Our experience, professional reputation, forensic attention to detail and negotiating skills mean we are well-placed to achieve positive outcomes.”

For more information about our taxation investigation services, please contact us