Two pizza franchisees have been jailed for a £600,000 tax fraud.
Mukesh Gordhanbaki Patel age 55, and Harishchandra Desai age 61, ran 4 franchised Pizza Hut takeaway outlets in Hampshire from October 2002 to September 2011: 2 in Southampton, and 1 in each of Poole and Bournemouth – trading as Pizza Delivery Services Ltd.
A civil investigation by HMRC into the business found it had submitted 9 fake VAT purchase invoices to HMRC between April 2005 and July 2007: falsely reducing the amount of VAT due. The taxman then launched a criminal investigation. HM Revenue and Customs criminal investigators carried out substantial 3rd party enquiries. HMRC say they “worked closely with Pizza Hut UK Ltd to analyse sales data, and records”. The tax inspectors discovered that, although the company was registered for VAT, Patel and Desai only declared takings from 3 of the outlets. The figures for the Poole business were not included on VAT returns. This showed that Patel and Desai suppressed the turnover figures from 1 July 2007 to 30 June 2010, leading to a shortfall of almost £200,000 of VAT. Pizza Delivery Services Ltd also failed to submit VAT returns for any of its outlets from July 2010 to September 2011 prior to them going into insolvent liquidation, leading to a further VAT debt of over £400,000.
Patel and Desai pleaded guilty to Cheating the Public Revenue contrary to common law of £598,415. They were sentenced on 20 December 2013 to jail sentences of 18 months: of which HMRC say they “will serve half in custody”. Confiscation proceedings to recover some of the evaded tax, and a review of the men holding company directorships are ongoing.
Lynam Tax Investigation Experts have a vast amount of practical experience in managing serious tax fraud investigations. If you are worried about a tax investigation we can advise you on the best course of action. If appropriate, we can help you manage any necessary 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.
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