Man admits £38k VAT fraud

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A leading Belfast judge on Friday urged the tax authorities to step up checks after a man defrauded HM Revenue and Customs out of £38,000 without making a single VAT payment.

Paul Gordon, 46, of Dunmore Park, Belfast, walked free with a suspended sentenced after he pleaded guilty to a single charge of knowingly furnishing a false electronic VAT return.

A prosecution lawyer told Belfast Crown Court that Gordon had claimed around £38,000 in VAT payments between November 1, 2007, and April 30, 2013.

The court was told that Gordon had set himself up in a flatpack furnishing business with the assistance of an enterprise grant.

The lawyer told Deputy Belfast Recorder Judge Corinne Philpott QC that Gordon was making quarterly returns for VAT repayments on goods, services and expenses.

“He set up the business with the intention of trading but it didn’t work out,” said the prosecution lawyer.

“This was not a fraud from the outset. He did this by chance and once he saw he could get away with it, he continued on. He was claiming back VAT but did not make a single VAT payment.”

Judge Philpott QC remarked: “But how was he able to get away with claiming back VAT if he was not making any VAT payments? Why where no alarm bells ringing?

“How did this go undetected for two years? Did nobody check or pick up the fact that he was always claiming back VAT but he was not making a single VAT payment?”

The prosecution lawyer explained that since 2012 all VAT returns were completed electronically.

He added that the system worked on the “good faith and trust” of those submitting VAT returns and VAT payments.

The court heard that Gordon was caught out by a random check on his VAT claims.

When he was later visited by a VAT investigator, the court was told, Gordon admitted the VAT fraud.

Judge Philpott QC told Gordon: “This was complete theft and VAT fraud is a serious matter.”

However, the Deputy Belfast Recorder added that although the crime had crossed the “custody threshold”, she was taking into account his early guilty plea, his personal circumstances and his medical problems.

The judge sentenced Gordon to 18 months in custody but suspended the sentence for three years.

Commenting on how easy it had been for Gordon to defraud the VAT payments system, Judge Philpott QC said the tax authorities should “trigger an investigation after six months” if a person is claiming back VAT without making any VAT payments.

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