The ODF and the subsequent New Disclosure Opportunity (NDO) began in 2009. It gave tax payers the opportunity, for a limited time period, to come forward with details of outstanding offshore assets and accounts on the promise that they would be treated more leniently, but with the threat that the tax man would come down hard on anyone who chose not to use the facility and was later found out.
During the campaign, Roderick Smith (44) of Wigan told HMRC he had one offshore account in the Isle of Man, which HMRC already knew about. He did not mention 11 other accounts in an attempt to disguise his criminal activities.
His business partner, Stephen Howarth, (44), from Hyde, Cheshire, also failed to take the chance to disclose any of his accounts during the campaign.
The two men ran a Manchester company, Goldlogic Control Systems Ltd, which offered computer technology expertise to the car trade, with many customers based in Germany. They did not register their true level of sales with HMRC and instead put their profits in bank accounts in the Isle of Man.
HMRC was alerted to this by the German tax authorities, and its investigators discovered that, over a six-year period, the men evaded around £500,000 in UK income tax.
Mike Preston, HMRC Assistant Director, Criminal Investigation, said: "Smith and Howarth stole from UK taxpayers, using the money that should have paid for public services to fund luxury lifestyles filled with prestige cars and expensive holidays.
“By failing to declare the true level of sales in Europe, and pay tax due on these earnings, they must now face the consequences of their actions in jail. HMRC is clamping down on tax evasion and targeting UK taxpayers using offshore accounts to disguise their wealth.”
HMRC investigators identified sales totalling £1,255,615 in Germany, while the company declared only £49,650 of this money in sales for the same period.
The balance was siphoned off into the offshore accounts of five shell companies registered in Mauritius and the Isle of Man, created by the directors solely for the purpose of tax fraud. Smith’s actions were compounded by also lying to his accountant.
His Honour Judge Warnock told the men as he sentenced them in Liverpool Crown Court: “You cheated the Revenue, and therefore this country, by evasion of income tax. The authors of your references will be shocked and disappointed at what, in effect, were crimes motivated by greed and selfishness. Only sentences of imprisonment are appropriate in respect of the offences you have committed. To suspend these sentences would offend any reasonable sense of justice on the part of the honest taxpayer.”
Smith was jailed for 15 months and Howarth for 12 months. Confiscation orders were issued in respect of Smith for £300,000 and Howarth for £200,000. They must pay within 24 months or they will be jailed for a further 15 and 12 months respectively. Both men must pay £5,000 court costs. Smith has already paid £40,000 under the ODF scheme.
If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'.
Susie Hughes © Shout99 2013