A leading professional tax advisor, David Perrin, has been found guilty of trying to fiddle HMRC out of £70m, in a Gift Aid tax scam. Perrin, aged 46, of Luton, had worked for the Inland Revenue in the late 1980s and early 1990s. He went on to become Deputy Managing Director at Vantis Tax Ltd. He now faces a possible prison sentence and confiscation of his assets.
He devised and operated a bogus tax avoidance scheme, which purported to exploit a loophole in the law on giving shares to charity. From 2005 to 2006 he promoted the tax dodge to more than 600 wealthy taxpayers; charging fees of more than £2m in the process. But the sting was in the tail. Rather than relying on a technical loophole in the law, Perrin’s scam relied on deception and evasion.
Vantis’ clients included a number of celebrities, although there is no suggestion clients knew of the fraudulent aspects of the tax dodge.
In an act of extreme hubris Perrin recorded a debased version of the Gloria Gaynor classic “I will survive”; including a verse: “They should have changed that stupid law, they should have buggered charity, but they have left that lovely tax relief, for folks to pay to me.”
Perrin’s fiddle involved advising clients to buy shares, which were only worth a few pence each, in 4 new special purpose companies he had set up. After listing those companies on the Channel Islands’ Stock Exchange he then, in a practice commonly known as ramping, he paid his stooges – from a secret offshore bank account – to buy and sell the shares: in order to artificially inflate their market price. In the next step in the convoluted racket, he then instructed the share owners to donate over 300 million shares – which were worthless but had artificially inflated values – to a number of innocent UK-registered charities. The clients then claimed £70m Gift Aid tax relief, as if they had donated shares worth the falsely inflated values.
Vantis’ London offices were raided by HMRC tax investigators in 2006. At the time it was listed on the stock market. It subsequently went into administration in 2010; at which time it was the UK’s 13th largest accountancy firm by fee levels.
Perrin was convicted of “dishonestly submitting, facilitating and inducing others to submit claims for tax relief”. The taxman has begun Confiscation Proceedings against him and he will be sentenced on 9th February.
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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