Category Archives: HMRC

Recruiter places ‘phoenix’ firm into liquidation just months after repurchase erased millions in debt

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New company reportedly quickly fell behind with promised repayments to administrator

A recruitment executive who was allowed to buy back the assets of his bust company in instalments, despite it accumulating almost £3m of debt, has placed his new business into liquidation after falling behind with promised payments to the administrator.

The news is the latest event to raise questions about the practice of “phoenixism”, accounting’s controversial art of liquidating companies to allow directors to return with a new entity, free of debts.

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UK asks banks for feelgood stories about keeping out dirty money

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City firms tapped for case studies to try to convince global watchdog that London has cleaned up its act

The government is asking bankers and lawyers to provide feelgood stories about how they blocked dirty money from entering the UK, as ministers try to prove the UK’s money-laundering controls are working.

The Treasury’s call for evidence is meant to illustrate that the UK has upped its game when it comes to preventing financial crime, particularly since its last dismal assessment by the Financial Action Task Force (FATF) global crime watchdog in 2018, which fuelled allegations that London had become a hub for “dirty money”.

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Wealthy British nationals fleeing Gulf conflict bypass UK to avoid tax bills

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High-net-worth residents of UAE heading to Ireland and France to wait out missile attacks before tax year ends

Wealthy UK nationals fleeing war in the Gulf are seeking sanctuary in countries such as Ireland and France to avoid hefty tax bills back home.

In the face of possible demands from HM Revenue and Customs, high-net-worth individuals who had been living in the United Arab Emirates and neighbouring countries are hoping to wait out the missile and drone attacks elsewhere rather than return to the UK.

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UK recruiter emerges from insolvency for third time, avoiding millions owed in tax

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Hampshire business seems to have benefited from ‘phoenixism’, which costs the taxpayer about £800m a year

A UK recruitment business has been acquired out of administration for a third time in four years as part of a succession of deals that left some of the former management team in place and millions of pounds owed to the public purse.

The chain of insolvencies appears to contain more examples of phoenixism – a process when companies are liquidated and directors are able to rise from the ashes with a new entity, free of debts.

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Plant importers say border delays in Kent could drive up prices and stop deliveries from EU

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Traders report long waits at Sevington inspection post and claim trees and shrubs are repeatedly being damaged

Importers of plants say long delays and damage to shipments at a Kent border control post risk driving up prices and could lead to transport companies stopping deliveries across the Channel.

Traders have reported long waits in recent weeks at the government’s Sevington facility off the M20 near Ashford, which was built to check goods of plant and animal origin arriving from the EU. One importer said delays were adding £200 of costs to each load.

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Widow of man conned out of pension savings to lose half the compensation to tax

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Robert Dewar’s widow, Susan, is a leading campaigner over multimillion-pound Norton Motorcycles fraud

The family of a deceased man, who was conned out of his retirement savings after investing in the Norton Motorcycles pension scam, is to lose almost half the subsequent compensation award because of a little-known tax rule.

A long-running battle to win an award from the Fraud Compensation Fund (FCF) meant that Robert Dewar’s pension was not reimbursed until 2024, five years after his death at the age of 64.

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UK chasing £90m in taxes from temp staffing firm rescued from insolvency

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The £18m deal to acquire Challenge Recruitment Group assets from administration repaid private funders in full

The UK exchequer is chasing about £90m in unpaid taxes after a temporary staffing business was rescued from insolvency proceedings in an £18m deal that reimbursed private funders in full.

The main assets of Challenge Recruitment Group, which counted Tesco, Sainsbury’s and Co-op among its top customers, were acquired from administration in July by the US website swipejobs, in what appears to be the second time the British staffing business has emerged from insolvency while owing tens of millions of pounds to the exchequer.

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Court orders seizure of counterfeit underwear seller’s £90m assets

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Ferrari and property owned by Arif Patel, tax fraudster who has been on the run since 2011, will be sold at auction

A self-styled clothing tycoon who sold counterfeit socks and pants while operating an extensive fraud ring will have all his UK assets seized after the Crown Prosecution Service won a court order to confiscate up to £90m worth of property and luxury cars.

Arif Patel, 57, from Preston, Lancashire, who has been on the run since 2011, will have homes and business premises he owned taken from him after a confiscation order granted by a judge at Chester crown court on Thursday.

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100,000 UK taxpayer accounts hit in £47m phishing attack on HMRC

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MPs on Treasury committee hear that those affected were being contacted and would face ‘no financial loss’

HM Revenue & Customs has lost £47m after a phishing scam breached tens of thousands of tax accounts, a group of MPs has heard.

Two senior civil servants at the tax authority told the Treasury committee that 100,000 people had been contacted, or were in the process of being contacted, after their accounts were locked down in what the officials said was an “organised crime” incident that began last year.

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UK tax administration costs spiralling due to complex system, says watchdog

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Businesses pay hundreds of millions of pounds more and losing trust in HMRC, reports National Audit Office

An increasingly complex tax system is burdening the government and businesses with hundreds of millions of pounds more in administration costs, Whitehall’s spending watchdog has warned.

The report by the National Audit Office (NAO) also said “poor levels of service” meant some taxpayers and their representatives were “finding it more difficult to deal with their tax matters and are losing trust in HM Revenue & Customs [HMRC]”.

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Regulators urged to examine UK business dealings with Bangladeshi ex-minister

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HMRC and FCA asked to look into property deals with Saifuzzaman Chowdhury now under investigation for corruption in Dhaka

British regulators have been urged by MPs to examine the relationship between London estate agents, lawyers and lenders and a former Bangladeshi government minister under investigation for alleged corruption.

Saifuzzaman Chowdhury was the land minister in Bangladesh until earlier this year, when the government of Sheikh Hasina was spectacularly toppled, after her regime’s violent suppression of student protests.

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Doubts grow over Labour’s VAT plan for private schools

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The Treasury refuses to confirm 1 January start date as unions, tax experts and school leaders say it is unworkable

Government plans to impose VAT on private schools from 1 January next year may have to be delayed because of warnings from unions, tax experts and school leaders that meeting the deadline will cause administrative chaos and teacher job losses, and put pressure on the state sector.

The Treasury on Saturday night refused to confirm that the plan to impose 20% VAT on private school fees would go ahead from 1 January, as confirmed by the chancellor, Rachel Reeves, in July, instead saying it would be introduced “as soon as possible”.

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Nadhim Zahawi’s lawyers ‘breached code to stifle HMRC revelations’

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Former chancellor’s solicitor accused of breaching code of conduct by threatening legal action against tax campaigner

Nadhim Zahawi instructed his lawyer to threaten legal action against a tax campaigner who helped reveal that the then chancellor was under investigation by HM Revenue and Customs, according to a tribunal document.

Zahawi’s solicitor, Ashley Hurst, is accused of breaching his regulator’s code of conduct by attempting to prevent Dan Neidle from publishing correspondence threatening legal action over the tax expert’s revelations about the then Tory leadership candidate.

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Tory donor Lycamobile handed winding-up order from HMRC amid tax dispute

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Pay-as-you-go simcard seller often filed late returns, had accounts queried by auditors and was embroiled in eight-year VAT battle

Lycamobile, a telecoms company that has given more than £2m to the Conservative party, has been issued with a winding-up petition by HM Revenue and Customs, amid a long-running VAT dispute.

The company, founded by businessman Allirajah Subaskaran in 2006, sells pay-as-you-go sim cards that are popular with low-paid workers wanting to make cheap phone calls to family overseas, as well as in the UK.

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Call waiting times at HMRC rise 350% in five years, says NAO report

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Report from public spending watchdog comes soon after similar data from parliamentary committee

Average call waiting times at HM Revenue and Customs have soared by more than 350% in five years, with increasing numbers of people not getting through in the first place or having their calls terminated, according to an official report that says the public is being “let down”.

The National Audit Office (NAO) said the quality of customer service provided by HMRC had been “far below” the levels expected in recent years, and that its phone lines in particular were “not delivering”.

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Work and pensions committee chair tells ministers to fix carer’s allowance issues

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Stephen Timms says DWP letting unpaid carers incur ‘enormous accidental overpayments’

Ministers have been told to “immediately” fix the issues causing tens of thousands of unpaid carers to incur “enormous accidental overpayments” amid growing anger over the carer’s allowance scandal.

Stephen Timms, the chair of an influential parliamentary committee, said he was “very troubled” that scores of carers were being forced into financial distress as a result of the government’s mistakes.

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Treasury disbanded non-dom tax policy unit weeks before budget, sources say

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Exclusive: Officials fear government is ill-prepared for lobbying from wealth advisory industry after taxation overhaul

The Treasury disbanded a unit tasked with offshore and non-dom tax policy weeks before announcing significant changes in the budget to the way foreign residents are taxed, sources have said.

The unit, which comprised technical experts on offshore tax issues, included specialists on non-dom policy. These officials would, according. to the sources, have been expected to help manage the implementation of a replacement for non-dom status as outlined by the chancellor this week.

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HMRC struggling to cope as customer service levels hit ‘all-time low’

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New report notes ‘continued decline’ and rising call-waiting times as ‘fiscal drag’ pulls growing numbers of people into an ailing system

Customer service levels at HM Revenue and Customs have sunk to an “all-time low”, parliament’s spending watchdog has said.

Users regularly encounter long call-waiting times as the tax department apparently struggles to cope with demand, a report by the cross-party public accounts committee (PAC) has found.

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HMRC investigations of wealthy ‘tax dodgers’ halve in five years

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The drop in civil inquiries by fraud unit sparks criticism that the authority’s use of its powers of enforcement are waning

The number of civil investigation cases opened by a HM Revenue and Customs (HMRC) fraud unit investigating offshore, corporate and wealthy taxpayers has fallen by more than half in five years, figures reveal.

The Observer reported last month that HMRC has not charged a single company under landmark legislation to crack down on tax evasion. Campaigners warned that HMRC was undermining its own deterrents by failing to use its criminal enforcement powers.

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Fujitsu won £1.4bn in new government contracts after court ruling on Post Office software bugs

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MPs find Treasury-affiliated bodies have engaged Horizon firm since damning 2019 high court judgment

The Japanese technology company Fujitsu, whose flawed technology for the Post Office led to the wrongful prosecution of hundreds of subpostmasters, is confirmed to have held contracts worth more than £3.4bn linked to the Treasury since 2019.

Figures published by the Commons’ treasury committee show £1.4bn of contracts were awarded to Treasury-affiliated organisations after a high court ruling in December 2019 over the company’s software. The judgment found that “bugs, errors and defects” in Fujitsu’s Horizon system could cause shortfalls in Post Office branch accounts.

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