Roderick Smith and Stephen Howarth, who ran Manchester based company Goldlogic Control Systems Ltd, were recently handed prison sentences of 15 months and 12 months, respectively, for evading UK tax of around £500,000 over a six year period.
Goldlogic provided expertise in computer technology to the automotive industry, with many of their clients based in Germany.
Smith and Howarth suppressed the company's real sales by diverting profits into bank accounts located in the Isle of Man. Following information provided by the German tax authorities, HMRC discovered that the company had made sales of £1,255,615 in Germany but only £49,650 of this income had been declared to HMRC. The remainder monies had been channelled into offshore accounts of five shell companies registered in Mauritius and the Isle of Man that had been established purely to aid their fraudulent activities.
Messrs Smith and Howarth could have divulged their offshore accounts via HMRC's Offshore Disclosure Facility (ODF) back in 2007 but Howarth ignored the Revenue's campaign and Smith only volunteered information about one of the twelve accounts he controlled offshore, failing also to tell his accountant. Smith paid £40,000 under the ODF.
HMRC's assistant director of criminal investigation, Mike Preston, said that the pair had used their ill gotten gains to provide luxury lifestyles comprised of “prestige cars and expensive holidays.”
Summing up at Liverpool Crown Court, Judge Robert Warnock said that the fraudsters were motivated by “greed and selfishness” before handing down their sentences. Both Smith and Howarth are also subject to confiscation orders issued under the Proceeds of Crime legislation for £300,000 and £200,000 respectively. Unless these are paid within 24 months the pair will spend a further 15 months (Smith) and 12 months (Howarth) behind bars.
Both men also have to pay court costs of £5,000.
They should have used Barcap’s services. Most bankers probably hidden more money in offshore accounts than them and got away, legally.
Smack the little guy! This pales in insignificance when compared to the banking and horse-meat scandals, but of course the “too big to jail” always get away with it!
Is this not similar to what Starbucks and Co. did recenlty?
Oh so scared, HMRC closing in are they? on the little guys only of course..you know the separate legal system we have to Starbucks…f*ck u hmrc, pricks
Allowing only a base tax allowance of 6kPA, over a six year period and assuming the 40k under ODF was paid at one third, AND NO EXPENSE ALLOWANCE WHATSOEVER, then the claim of the evasion as being 500k means that the tax percentage applied is at least 55% tax.
This is therefore an impossible claim.
** DON’T WORRY EVERYBODY THE IT INDUSTRY IS NOW OFFSHORE ANYWAY – IT HAS BEEN SOLD OFF.
I’m off as soon as I can go. Great weather, welcoming people. Cobra or Singha they are both great.
Wow you guys are angry. Jane, with an attitude like that nobody will want you.
At the end of the day these guys deliberately hid earnings to avoid paying tax so deserve to be punished.
I do agree though that HMRC needs to also look at the big guys and hit them hard.
@Tim…nah…the law no longer applies when it is clear that it is a two tier system and corrupt to the core…If they want people to follow the law, set an example with Starbucks. Until then I will avoid tax every moment I can
[quote name=”Jim Murray”]@Tim…nah…the law no longer applies when it is clear that it is a two tier system and corrupt to the core…If they want people to follow the law, set an example with Starbucks. Until then I will avoid tax every moment I can[/quote]
Tax avoidance is the legal usage of the tax regime to one’s own advantage, to reduce the amount of tax that is payable by means that are within the law
What these guys did was not legal
Until then I will avoid tax every moment I can[/quote].
Tax avoidance is the legal usage of the tax regime to one’s own advantage, to reduce the amount of tax that is payable by means that are within the law
Very true tax avoidance is not illegal, but alot of these off shore payroll firms use the avoidance schemes as selling points to hype NET TAKE HOME PAY! up to 95% of your contracts.
And what the little man doesnt know is your not contributing sufficient NI! dont care now! you will when you go for your state pension. Only to find, you havent contributed enough NI.
[quote name=”Sean Sinclair”]
And what the little man doesnt know is your not contributing sufficient NI! dont care now! you will when you go for your state pension. Only to find, you havent contributed enough NI.[/quote]
Hahaha..u really think I am relying on some pitiful State pension for retirement? lol my exit plan is property, 3 or 4 of them
and avoidance might be legal, but the way HMRC bend and create new rules every two seconds you don’t know if it really is