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Corby Scaffolder Sentenced in VAT Scam

April 15th, 2014

Keith Vallance had been disqualified from acting as a company director, but he was running 3 companies: none of which had registered for VAT.  He then used fake invoices to defraud the taxman of £250,000.

Vallance, aged 63, from Corby in Northamptonshire, ran: Sovereign Scaffolding Ltd, Sovereign Scaffolding Services Limited and Sovereign Scaffolding Services (Contracts) Ltd. In a straightforward tax fraud the companies did not obtain an HMRC VAT registration.  The HMRC Criminal Tax Unit discovered that Vallance was issuing his customers with invoices with made-up VAT numbers, or numbers from other de-registered companies.  From February 2008 to October 2012 he then simply kept the VAT (of £254,000) for himself, instead of paying it over to HM Revenue & Customs.

Vallance pleaded guilty to Cheating the Public Revenue and contravening a disqualification order made under Company Directors Disqualification Act.

He was sentenced on 4 April 2014 to 2 years in jail for Cheat and a concurrent 6 months imprisonment for breaching the Company Directors Disqualification Order. Plus he was disqualified from being a company director (again) for another 7 years.

How can Lynam Tax help me if I’m worried about prosecution?
Lynam Tax Enquiry Experts have a long history of successfully helping clients avert prosecution for tax offences.  When HMRC do pursue a Criminal Investigation we have a great deal of experience of working closely with specialist defending solicitors, and in the preparation and checking of evidence bundles: which can frequently lead to large reductions in sentences, and in the amount HMRC seek to recover by way of Confiscation Orders.

Call us for a no obligation discussion in total confidence.

Paul Lynam : 0845 643 9997 or

Andrew Nutbrown : 0771 877 8710

PS: Get out of jail free card! Time limited offer!
Until April 2016 almost everyone who is worried that they could be subject to a criminal investigation for tax fraud can get guaranteed immunity from prosecution – by registering for the Liechtenstein Disclosure Facility (LDF); and then going on to make a full voluntary disclosure.  Our tax investigation specialists have a massive amount of experience in helping clients with the LDF, and are ready to assist you now.


Paul Lynam : 0845 643 9997 or

Andrew Nutbrown : 0771 877 8710

Employment Agency Gets £158M Tax Bill at Tax Tribunal

April 10th, 2014

Reed Employment Plc, one of the Britain’s largest and best-known employment agencies, has to pay up to £158 million tax – on payments it made to of thousands of temporary workers – following an adverse tax appeal at the Tax Tribunal this week.

The Upper Tier Tribunal judged that Pay As You Earn (PAYE) and National Insurance Contributions (NICs) were due on so-called “travel to work expenses” paid to Reed’s “employed temps” between 1998 and 2006. The total bill to include the PAYE, NIC and interest could be as much as £158,000,000!

Reed had paid its “employed temps” the “expenses” without making deductions for PAYE and NICs. Reed contended that HMRC had originally allowed these arrangements – and so could not now collect the taxes due. The Tax Tribunal felt that HMRC had not been given a full picture of how the arrangements worked; and went on to find that the “expense payments” were part of the ordinary salary on which PAYE and NICs were due.

What does it mean for me?
If you have a tax dispute or long running tax enquiry The Tribunal Appeals process can be an excellent way to resolve matters through an independent and objective judgment. But success at any stage depends on the quality of the fact finding, presentation skills and technical knowledge of your tax adviser – and their ability as an advocate.  Lynam Tax Enquiry Experts have prepared for many Tribunal hearings and the process has usually meant HMRC conceding before the formal meeting.  We have also presented cases successfully at formal contentious hearings. We will fight your corner tenaciously, but also with the subtlety and skill honed from 67 years’ real experience.

If you need advice and help in a contentious tax dispute call:

Paul Lynam : 0845 643 9997 or

Andrew Nutbrown : 0771 877 8710

or email

7 Years Prison for Cornish Tax Fiddling accountant

April 10th, 2014

An accountant from St Austell in Cornwall who cheated HMRC out of £2 million was sentenced to 7 years in prison this week after Cornwall’s biggest ever tax fraud trial.

Simon Terry Pearce, aged 48, had worked as an accountant for 27 years, running S T Pearce Accountants, from St Austell.

Following complaints from a number of his clients HM Revenue and Customs launched a criminal tax investigation. The tax inspectors found that for 8 years Pearce had claimed and pocketed false tax repayments on behalf of at least 16 clients, and sent in deliberately incorrect Tax Returns in order to defraud the Revenue of Income Tax, VAT and Capital Gains Tax.   In order to carry out his various tax fiddles he fiddled his own Self-Assessment Tax Returns showing suppressed profits, and sent various forged documents to HMRC and Companies House.

HMRC criminal investigators arrested Pearce in May 2011 and he was charged in October 2012 with: 2 counts of cheating the public revenue, contrary to Common Law; 15 counts of fraud by abuse of position; 1 count of fraud by false representation; 1 count of theft; 1 count of Forgery; and 11 additional counts under the Fraud Act 2006 and Forgery and Counterfeiting Act 1981.

He pleaded not-guilty in June 2013, but a jury found him guilty of 26 of the 30 offences; following a 10 week trial: which resulted in him getting a custodial sentence of 7 years in jail.

Lynam Tax Enquiry Experts
Lynam Tax Enquiry Experts have a vast amount of practical experience in managing serious tax fraud investigations.  If you are worried about a tax enquiry we can advise you on the best course of action.  If appropriate, we can help you manage any necessary tax disclosures.  If you are facing criminal charges we can help you obtain first class legal representation, in order to obtain the optimum outcome for you, your business and your family.

*For a free, private, no obligation consultation, call Paul Lynam today on 0845 643 9997
or Andrew Nutbrown on 07718 778710

Football Legend Jailed For Tax Evasion

March 20th, 2014

Last week World Cup West German World Cup winner Uli Hoeness cheered Bayern Munich (the club of which he was president) as they beat Arsenal in the Champions League.  Later that week he was in the dock being sentenced to three and a half years in prison for a €28.5m tax fraud.

Hoeness, who got a World Cup winners medal in 1974, admitted hiding his stock market gains in a Swiss bank account. He had taken part in a “voluntary disclosure”, which allows German tax dodgers to avoid prosecution by fully declaring their back taxes, and paying them along with 6% interest. But tax investigators discovered that Hoeness’ gains were 10 times greater than the amounts he had confessed to: and decided to prosecute him.

What does this mean for me?
With the large number of tax amnesties taking place in the UK at the moment this is a timely reminder that voluntary disclosures need to be correct and complete: if taxpayers are to benefit from the generous terms.  Where people send a disclosure into HMRC, using one of the tax amnesties (e.g. the Jersey Disclosure Facility) they need to realise that HMRC may still investigate the issue.  If HMRC discover that a disclosure is materially incorrect, then all of the benefits can be withdrawn, and a criminal tax prosecution can be launched.

How can Lynam Tax Disclosure Experts Help Me?

HMRC use specialists to review all voluntary tax disclosuresLynam Tax disclosure specialists can help you get your disclosure right first time: in order to benefit from all of the generous terms currently available.

If you have a disclosure to make to HMRC our experts have 67 years’ experience in this field and can help you now.

For an initially free and totally confidential consultation telephone:

Paul Lynam: 0845 643 9997

Andrew Nutbrown: 07718 778710

J’accuse! French Politician hid £2M in Manx Bank Tax Fiddle

March 20th, 2014

The Ex-Budget Minister of France’s Socialist government, Jerome Cahuzac aged 61, has been accused by his estranged wife of using a secret Isle of Man bank account to channel money in order to evade tax; according to a report by Peter Allen in this week’s Daily Mail.

Cahuzac played a key role in the introduction of the 75% tax rate, designed by the Socialists to punish the French middle classes.   Ironically, as Budget Minister he had been in charge of France’s overall tax investigation regime.

Last year President Hollande threw Cahuzac out of the government and the party; following revelations that he had stashed millions of euros in Swiss bank accounts and Singapore banks as part of an offshore tax fraud.  Now his wife Patricia has reported that he hid £2 million laundered through a bank account on the Isle of Man.

What does this mean for me?
Unless you’re a French champagne-socialist government minister you may not feel an immediate connection to this issue.  However, this is once again a reminder of how seemingly secret information about tax evasion can leak out.  Wronged wives and mistresses have long been the number one source of quality information to HMRC’s tax inspectors.  And, currently the UK’s taxman is being given access to full details regarding bank accounts in Switzerland, the Isle of Man, and the Channel Islands of Jersey and Guernsey.

How Can Lynam Tax Disclosure Experts Help Me?
If you have an offshore bank account and historic tax problems you may want to consider the current offshore tax amnesties, including the Isle of Man disclosure facility.  Our Offshore Tax Disclosure Specialists have a huge amount of experience in dealing with tax enquiries and disclosures relating to offshore bank accounts.

For a wholly confidential and initially free discussion of these issues, call:

Paul Lynam: 0845 643 9997

Andrew Nutbrown: 07718 778710

Welsh Printer told: Pay £135k – or Go To Jail

March 18th, 2014

A Cardiff based printer and tax fraudster was ordered to pay the taxman £135,000, or go to jail for 32 weeks; earlier this month.

Andrew Allen, aged 52 of St Fagans in Cardiff, admitted defrauding HM Revenue and Customs by creating 6 false invoices – to back up fictitious sales purportedly made from an insolvent company he controlled to another business he owned.  The Newco then claimed an offset for the VAT falsely alleged to have been paid to the Oldco.

He pleaded guilty to 7 charges of tax fraud, accepting that he had recklessly made false statements to HMRC.  He was sentenced to 32 weeks imprisonment, suspended for 18 months: on the condition that he must pay compensation of £134,875 to HMRC, and prosecution costs of £2,800, by 31 March 2014. He is also subject to an electronically tagged curfew between 19:00 and 07:00 for 3 months.

Lynam Tax Investigation Experts

If you are currently being investigated for tax evasion our Lynam Tax Investigation Specialists will help you.  Do not delay!  Call us now for a free initial consultation, on a wholly confidential basis.

Call Paul Lynam: 0845 643 9997

US Senators Attack Swiss Banking Secrecy

March 11th, 2014

The global crackdown on tax evasion linked to offshore banking continues unabated.  A U.S. Senate committee has strongly criticised Switzerland’s banking secrecy laws during its investigation into Credit Suisse: according to Financial Times reports by Gina Chon.

The Senate committee believe that Credit Suisse had helped over 22,000 US citizens to evade taxes.  The bank is apparently not denying that claim, but is currently claiming that it is not able to hand over their clients’ details because of Swiss laws on confidentiality.  The current draft new US/Switzerland double tax agreement would allow Swiss banks to hand over details of clients involved in tax evasion.  But at the moment the U.S. Senate is not ratifying the agreement.

Credit Suisse is one of 14 banks currently under investigation by the U.S. Department of Justice in connection with allegations they helped US citizens defraud the tax authorities by using hidden offshore bank accounts.  A further 106 other Swiss banks have applied for so-called “deferred prosecution agreements”; which would allow them to pay financial penalties instead of risking criminal prosecution.

The United Kingdom had already brokered arrangement with the Swiss banks in order to obtain details of UK citizens with accounts there, as part of the Swiss Tax Agreement.

What does this mean for me?
For UK residents who are not also American citizens, this issue probably has no immediate or direct impact.  However, it is continuing evidence of the massive efforts being made by governments around the world, including in Great Britain, to crack down on tax evasion and offshore bank accounts.  Generally speaking in this area the UK has followed America’s lead.  For example, the US FATCA laws now apply to all UK Crown Dependencies; which now have to do pass over details of UK residents’ bank accounts to the British taxman.  This has led to a number of tax amnesties, including the Jersey Disclosure Facility, Isle of Man Disclosure Facility and the Guernsey Disclosure Facility.

How can Lynam tax disclosure experts help me?

Lynam Tax Disclosure Specialists
have a huge amount of experience in assisting clients with offshore bank accounts sort out their UK tax liabilities; on very favourable terms.  For a wholly confidential and initially free discussion of these issues, please telephone:

Paul Lynam: 0845 643 9997

Andrew Nutbrown: 07718 778710

Tribunal Gives Costs Warning

February 18th, 2014

A taxpayer was awarded costs against HMRC in respect of an aborted Tax Tribunal hearing, because even though HMRC had withdrawn their intention to fight the appeal: they had done this two weeks too late, and therefore the taxpayer had incurred additional costs.  However, despite this win by the taxpayer, the First Tier Tribunal issued a strong wording that in future the boot could be on the other foot, and HMRC may claim expenses against taxpayers or their advisers in similar situations.

The decision by the Tribunal judge, Kevin Poole, was issued on 13 January 2014. in respect of a taxpayer, Mr Ping Kom Lam.  Mr Lam’s appeal was due to be heard by the Tribunal.  His advisers gave HMRC new information in December 2012, which persuaded HMRC to withdraw from the appeal.  The Tax Tribunal judge decided that HMRC needed a reasonable period of time to consider the new material, but said they should have done so by 31 January 2013.  Therefore, he concluded that the Mr Lam’s costs in the first 2 weeks of February had been incurred unnecessarily – due to HMRC’s delay.  Mr Lam had made a claim for costs of £350, but the Tribunal decided that reasonable costs would have been £150: and ordered HMRC to pay that to him within 56 days.

At first glance this looks like a win for the taxpayer: albeit in respect of a very small sum.  However, the judgement came with a strong warning.  Judge Poole wanted HMRC and taxpayers and advisers to be aware that if they delayed in providing information to the other side in appeal cases before the Tribunal, and that once that information was supplied it led to the withdrawal of the other party from the hearing: then the side which had delayed providing the information could be penalised: whether that be HMRC or the taxpayer, or the adviser.

Judge Kevin Poole stated: “I should sound a note of warning to Appellants and their advisers.  If it could be shown that an appellant was in possession of information or evidence that would have persuaded HMRC to withdraw its defence of an appeal, but for whatever reason that appellant withheld that information or evidence, and as a result put HMRC to the unnecessary effort and expense of continuing with the appeal until a much later date, HMRC may well have a claim for their own costs in respect of the appellant’s unreasonable conduct in doing so, even though the appeal itself is successful as a result of their withdrawal upon the eventual production of that information or evidence.  In such circumstances, a wasted costs order might also be made against an adviser personally under section 29 4) of the Tribunals, Courts and Enforcement Act 2007, if the Tribunal found that adviser guilty of an improper, unreasonable or negligent act or omission”.

What does this mean for me?
Taking an appeal to the Tribunal can be a very effective way of bringing a tax enquiry or tax dispute to a conclusion.  Taxpayers have a very good track record of winning appeals at the Tribunal.  However, in carrying out the very detailed preparation necessary for a Tribunal hearing it frequently happens that one party or the other comes across information which may be crucial to the outcome of the case: and which had not previously been drawn to the attention of the other side.  The judge is now warning that if this information is not brought to the other party’s attention at an early stage, then the Tribunal may award costs against the person who fails to share the information: if failing to do so means that the other party incurs unnecessary costs.  HMRC use specialist appeal teams.  Preparing for and taking a case to the Tribunal can be very worthwhile, but it is not an easy undertaking for unrepresented taxpayers or from tax advisers and accountants with little experience in this area.  This recent decision comes as a warning that there is now an additional risk that taxpayers and advisers who don’t prepare for the hearing in a thorough and professional way could now also face having to pay some of HMRC’s costs: as well as experience showing that they are more likely to lose the hearing as well.

How Can Lynam Tax Appeal Experts Help Me?
HM Revenue & Customs use ‘Appeals’ specialists to present its cases at Tribunal.  Lynam Tax Dispute Specialists have decades of experience in handling contentious tax appeals, and can assist taxpayers and their accountants and advisers; getting them the best results.

*Need help with a tricky tax dispute or a difficult tax appeal? Call us now for a discreet and no obligation discussion.  PS: No charge for your first consultation!

Paul Lynam: 0845 643 9997

Andrew Nutbrown: 07718 778710

Tax Taskforce Tackles “Hidden wealth”

February 17th, 2014

Every few months the taxman announces his latest “taskforces tackling tax dodgers”.  The first this year are aimed at: people in London, East Anglia and Wales who “who hide their wealth”; restaurants in London and East Anglia; and the construction industry in the Midlands.

Tax Taskforces are specialist teams carrying out intensive spurts of tax audits in specific sectors and geographic locations across the country.  They home in on areas that HM Revenue & Customs feel represent “high risk” in terms of tax evasion. They typically target tax payers in that sector or location for a period of 3 – 9 months.

The “hidden wealth” taskforce is aiming at people with offshore bank accounts;  or  whose lifestyles and assets (including their homes) are beyond their obvious means: suggesting that they have undeclared income.  HMRC claims to have “seen an increased risk of fraudulent activity in hidden wealth” and is hoping that this tax taskforce raises more than £2.4 million.

The taskforce tax investigators have brought in more than £130 million since their 2011/12 debut, and aim to collect more than £90 million from the taskforces being launched in 2014/15.

HMRC’s taskforce boss warned tax evaders that “If you haven’t declared all your income we will find you and investigate. You face a heavy fine and criminal prosecution as well.”

How can Lynam Tax Taskforce Experts help me?
HMRC taskforces are specialists in their filed.  If you are contacted by a tax taskforce then you may need specialist help on your side.  Our experts have enormous experience in all aspects of tax investigations.  We can help relieve your worry, and save you tax and penalties,  as well as keeping you out of prison.

*For a free, confidential chat about your tax affairs, don’t delay, call now:

Paul Lynam:  0845 643 9997
Andrew Nutbrown:  07718 778710

Landmark Penalties in Failed Tax Avoidance Case

February 11th, 2014

The presumption that taxpayers who have used a failed DOTAS registered tax avoidance scheme will not face penalties may have been overturned by a recent landmark Tax Tribunal decision.

Many promoters of tax mitigation arrangements have told clients that, even if the scheme ultimately fails and the tax is due, then no penalties would be charged.  And until now that has been true.  However in a decision given by the First Tier Tribunal on 16 January, two users of an unsuccessful DOTAS scheme – Bernard Litman and Ann Newall – were charged penalties for negligence of £24,000; after claiming tax relief on a marketed scheme, which the Tribunal decided lacked commercial reality.

The Facts
The well-known (and troubled) Isle of Man based tax mitigation scheme promoters Montpellier Group, had sold an off the shelf tax avoidance scheme to the pair – in order to create losses of £400,000, which would then be offset against their capital gains tax liability. The tax wheeze involved: the creation of several trusts; the use of a number of special purpose vehicle companies; and an interest free and unsecured “loan” for £400K – which was purportedly advanced to buy Capital Redemption Policies; which would then be surrendered, and the loan repaid.  They included DOTAS numbers on their SA Tax Returns: in compliance with the law, thus alerting HMRC to what they had done.

Following a Court of Appeal decision in a similar case, the taxpayers accepted that the scheme was not effective, and attempted to conclude a negotiated settlement with HMRC. Not satisfied with collecting the extra tax and interest, HMRC launched a tax enquiry: following which it decided to charge the pair tax-geared penalties of £59,000 (i.e. 25% and 20% respectively, of the extra tax due) in respect of their negligent behaviour.  Mr Litman and Mrs Newall appealed against these penalties to the Tax Tribunal.

The Hearing
It is notable that little evidence was put before the Tribunal on behalf of the taxpayers.  Further, they did not appear as witnesses themselves.  Their main, and indeed seemingly only, defence was that they had relied on professional advice – and so could not be treated as negligent.

HMRC argued the taxpayers failed to properly consider “straightforward, ordinary, commercial documents”, which had “glaring omissions”; and that they should have been aware that the transactions portrayed were either not actually carried out; or at least not in the way described in the documents.

The Outcome

The Tribunal decided that, as the taxpayers had taken professional advice, they could not be considered to be negligent for failing to understand the legal and tax consequences of the arrangements. However, the Tribunal were highly sceptical that the loan had any real existence.  The Tribunal decided that penalties should apply due to Litman and Newall’s “failure to enquire into the basic commercial reality of the transactions”.  The Tribunal did reduce the penalty loading to 10% each, creating overall penalties of approximately £24,000.

The Wider Consequences

This case has potentially very wide implications.

Traditionally, HMRC have not sought penalties in cases of failed tax avoidance schemes.  This was noted by the Tribunal judges who stated all the previously decided authorities on this point dealt with circumstances in which taxpayers had put incorrect numbers on a return, or failed to understand a complex area of law. The judges were not aware of any authorities dealing with a taxpayer’s obligations in respect of a complex packaged tax avoidance scheme, such as this.

This case in itself heralds a new aggressive approach by HMRC towards penalties in tax avoidance situations.  Secondly, no doubt the taxman will be emboldened by this decision, and we can expect to see the taxman attempting to charge penalties in many more failed DOTAS cases in future.  Thirdly, taxpayers in any tax dispute which is found in HMRC’s favour on the basis of the facts, rather than the technical tax issues, are now susceptible to a charge of negligence (or carelessness) and could now face significant tax geared penalties.

All cases, of course, stand on their own facts.  And one very distinctive feature of this case seems to be that very few facts, or points in mitigation, were put forward on behalf of the taxpayers in their defence.  Other cases, even quite similar ones, could have very dissimilar outcomes – if presented differently to the Tribunal.

How Can Lynam Tax Appeal Experts Help Me?

The taxman uses specialist ‘Appeals’ teams to lead its cases at Tribunal.  Lynam Tax Dispute Specialists have decades of experience in handling contentious tax appeals, and can assist taxpayers and their accountants with the process; in order to achieve the optimum results.
*If you need help with a difficult tax dispute or a contentious tax appeal call now for a confidential and no obligation discussion -

Paul Lynam: 0845 643 9997

Andrew Nutbrown: 07718 778710

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