Divorce, Prosecution, Confiscation: the VAT Man's Double Whammy
A farmer who swindled nearly £1m from the VAT authorities thought he was onto a good thing, until he went through an acrimonious divorce from his wife.
Between 1997 and 2001 Richard Coate claimed to have bought and sold more than 400,000 sheep, through a non-existent Spanish livestock dealer, and fraudulently claimed over £850,000 in VAT using the Flat-rate Scheme for Farmers.
However, when his marriage broke up, his wife Faye informed HM Revenue and Customs (HMRC) of the fraud. On visiting his farm, HMRC’s investigators found only 29 sheep, compared with the 2,500 which Mr Coate’s records showed should have been present.
In February, Mr Coate was found guilty at Bristol Crown Court and sentenced to 45 months in prison. HMRC are also commencing an action under the proceeds of crime legislation to recover £800,000 of assets from his estate.
Also in February, two butchers who pleaded guilty to creating a six-figure tax loss were each given a ten-month prison sentence and a £300,000 confiscation order; a confiscation order for over £3m was granted against a man who evaded tax by means of undisclosed offshore bank accounts; and a family credit fraudster was fined £50,000 and faced a confiscation order for £71,000. Lastly, a Bournemouth man, who admitted three counts of false accounting and two of forgery in connection with an attempt to conceal £1/2m of assets on which Inheritance Tax (IHT) should have been paid, was jailed for three years, the first person to be prosecuted for IHT evasion in the UK by the newly established Revenue and Customs Prosecution Office (RCPO).
The RCPO is clearly intending to seek confiscation orders as a matter of routine in cases in which tax cheating is proved in the criminal courts.
The authorities are taking an increasingly rigorous approach to cases of serious tax evasion and VAT fraud. If you are notified of an impending tax enquiry, take professional advice as soon as possible.
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