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Umbrella payroll company at centre of massive VAT fraud
by Susie Hughes at 13:19 13/06/17 (News on Business)
A family of fraudsters pocketed more than £45 million owed to the taxman in a VAT scam revolving around an umbrella payroll company.
Geoffrey Copp, 55, together with his son Joshua, 24, and brother Andrew, 51, ran Central Payroll Specialists (CPS), which was later rebranded as Quality Premier Services (QPS), based in Rickmansworth.

These were umbrella payroll companies, which were used by recruitment agencies to manage the wages of thousands of temporary workers.

However, the Copps did not pass the VAT they received from the recruitment agencies to HM Revenue and Customs (HMRC). Instead, they used it to fund their own extravagant lifestyles including luxury cars, art and property.

The scam came to light after information was passed to Essex Police, resulting in an investigation led by the Kent and Essex Serious Crime Directorate, with the assistance of HMRC’s Criminal Taxes Unit.

Enquiries led officers to Joshua Copp, who worked at Central Payroll Specialists and QPS.
HMRC enquiries revealed he declared his income as £19,256 for the tax years between 2010 and 2015. But his bank accounts were credited with £11.9million between 2011 and 2015.

Police executed a warrant to search his home where they found numerous items including designer clothing, Rolex and Audemars Piguet watches, and deposit transfers for a Las Vegas casino, which showed he had deposited chips and foreign currency worth $1.5million during a recent trip.

Enquiries revealed Copp was in the process of buying a £4.25 million property and among the nine cars registered in his name were a Ferrari F12 Berlinetta, a Lamborghini Aventador, a Bentley Continental, Rolls Royce Wraith and Rolls Royce Ghost.

VAT fraud
On his mobile phone, officers found a photo of a notepad showing calculations of how the VAT fraud was worked out and then split between him and his father and uncle. The original notebook was later found at his desk at QPS.

He was arrested on suspicion of money laundering and released on bail while enquiries continued.

Further investigative work by Essex Police and HMRC into CPS and QPS’s finances found that the companies paid just under £4 million in VAT between September 2012 and September 2015. HMRC investigators estimated there was just under £46 million in unpaid VAT.

Tax records also showed that Geoffrey and Joshua paid no income tax between 2009 and 2015, while Andrew had paid £15,930. Andrew was a director of QPS, of which his brother was a 100 per cent shareholder.

Police, accompanied by HMRC, executed further search warrants and arrested all three Copps on suspicion of conspiracy to cheat the public revenue and money laundering.

They found £55,000 cash hidden in various places at Geoffrey’s home in Stanmore, including inside a Bentley GTC Convertible on the driveway.

Several Rolex watches, works of art, a Lamborghini, Bentley and Range Rover were found at Andrew’s home in Cardy Road, Hemel Hempstead.

They also searched a property in Galley Lane, Barnet, which Joshua had recently rented.

Enquiries revealed Geoffrey owned at least one other property in Stanmore, which was mortgage-free, and a home in Malaga, and had bought three Bentley Continentals in cash between 2013 and 2015.

Andrew had five mortgage-free properties in England and one in Malaga.

In March 2016, all three Copps were charged with conspiracy to cheat the public revenue and conspiring to conceal, disguise, convert, transfer or remove criminal property.

They stood trial at Wood Green Crown Court on April 4. Geoffrey, Andrew and Joshua Copp were found guilty of the charges against them and were jailed for a total of 27-and-a-half years..

Detective Chief Inspector Josie Hayes, of the Kent and Essex Serious Crime Directorate, said: “Geoffrey, Andrew and Joshua Copp conducted a highly organised payroll fraud on a scale never before seen in the UK.

“They shamelessly took money destined for the public purse to fill their own wallets and brazenly fund extravagant lifestyles, which were beyond the means of many, including the workers whose wages they managed.

“This was unknown to the many hard-working temp staff whose wages they managed and the recruitment agencies who entrusted the Copps to manage payrolls and paid fees for those services.”

Essex Police is also now looking to recover as much of the cash as possible from Geoffrey, Joshua and Andrew Copp,

In the wake of this case, recruitment agencies have been warned to ensure that their suppliers are fully compliant before committing to using their services.

6CATS International, a global contractor compliance consultancy, has urged agency directors to check that all of their suppliers are fully compliant and operating in a completely transparent and legal way.

Michelle Reilly, CEO of 6CATS International, said: “This is an extreme case, yes, but it’s far from being an unusual one and over the past few years we’ve seen an increasing crackdown on firms that operate outside of the law and put the recruitment agencies they work for – and the contractors those agencies place - at serious risk. However, there are still many organisations out there under the misguided belief that they can somehow slip under the radar and, while few will be quite as extravagant as this one has been, it’s highly likely that they will be caught out. This will not only leave your firm scrabbling around to find a new supplier, but can also leave your contractors and even your agency at risk of a major punishment such as an unlimited fine or potentially a prison sentence.

“The potential gains for breaking the law are clearly high, but the risks are so much greater and with HMRC becoming ever more effective at tracking down tax evaders, those suppliers that are still operating non-compliantly will eventually be caught. The government knows it can bring in revenue from chasing down those committing evasion and with the introduction of legislation like the Common Reporting Standard and the Criminal Finance Bill, it’s only going to become harder to get away with operating outside of the law. It’s now time for recruitment agencies to take the bull by the horns and take responsibility for ensuring their suppliers are operating compliantly before it’s too late.”

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Susie Hughes © Shout99 2017

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