Jail and Confiscation for Offshore Tax Fraudster

The taxman has secured a criminal conviction (and a swingeing confiscation Order) in an offshore bank account related tax investigation.  HMRC are clearly keen to publicise the risks of not taking part in the tax amnesties (the New Disclosure Opportunity and the Liechtenstein Disclosure Facility) as they have headlined the story on the front page of their website under the NDO heading:  “Why should I come forward now?”.

The taxman says: “HMRC is obtaining details of offshore account holders from hundreds of financial institutions.  HMRC is introducing NDO as the final opportunity for those account holders with tax to pay to get their affairs up to date with the benefit of a fixed penalty.  HMRC will pursue those with offshore bank accounts and undeclared tax liabilities who decide not to make a disclosure. In these cases the penalties could be up to 100% of the tax due and in exceptional circumstances criminal investigation may be considered.”

They then go onto relate the cautionary tale of convicted tax fraudster 60 year old David Dalrymple from Cambridgeshire who was ordered to pay £3.6million following a confiscation order made by Cambridge Crown Court in September 2009.  Dalrymple had an interest in assets including a £2million trust fund in Jersey.  The confiscation order ended a five year investigation by HM Revenue & Customs (HMRC) that resulted in two men being jailed for a total of five years in 2007 and the “unravelling of a sophisticated tax fraud” of over £2million. The fraud involved suppliers paying rebate payment to two offshore companies owned by a Jersey trust of which Dalrymple and his family were the beneficiaries.  Between March 1995 and March 2001, Dalrymple diverted over £2.5 million of commissions resulting in over £1.2 million lost tax.

HMRC said “if Dalrymple had operated honestly the correct tax [£1.2 million] would have been paid…but instead he chose to conduct a fraud…and not only was a custodial sentence awarded but he has had to pay a considerable additional amount in confiscation.”   The confiscation order was for £3,668,000. The tax lost was nearly £2million the suppressed turnover was over £3million “in his hands” (£3.6million with interest) and legislation under the Criminal Justice Act 1988 enabled HMRC investigators to obtain an order for the greater amount.”

Anyone wanting to benefit from the advantageous terms of HMRC’s New Disclosure Opportunity now has until 4th January 2010 before the initial registration period ends. Anyone who registers for the New Disclosure Opportunity Tax Amnesty in time will have until 12 March 2010 to send in their full disclosure.  But if you miss the registration window you will not be able to participate and will miss out on the lower penalty terms; and risk an intrusive investigation and possibly prosecution.

Lynam Tax Enquiry Experts can help you with the registration and the disclosure. The NDO process is straightforward in simple cases.  But there are many pitfalls for the unwary or those with more complex tax affairs.  Badly managed Disclosures can have the reverse effect; leading to higher penalties a Civil Investigation of Fraud enquiry or even prosecution.

Lynam Tax Enquiry Experts have substantial experience of the first Tax Amnesty (Offshore Disclosure Facility) and the New Disclosure Opportunity and can help you with the registration and the disclosure.

Do not delay.  For a free, private, no obligation consultation, call Paul Lynam today on 0845 643 9997