If you or somebody close to you has been charged or arrested in connection to VAT fraud, you will probably be feeling very stressed, confused, worried and concerned about what’s going to happen.

These cases can be financially and operationally crippling to any business. Putting a legal team in place to craft a strong defence from the outset is critical to achieving a positive outcome.

There are several other offences for which you may also be accused, including:

Tax evasion

Money laundering

It’s vital that you have a competent and experienced legal team who can support you and skilfully defend you. These types of investigations involve huge amounts of evidence and are typically lengthy and complex. It’s likely that your assets could be frozen with a restraint order or you may be at risk of a being subject to a confiscation or cash seizure.

In this article, we aim to answer some of the questions that our VAT fraud clients typically ask. We aim to provide you with the support and guidance that you need. It’s vital that you avoid having your family or business caught in these cases.

What type of actions are considered VAT Fraud?

Here are some examples of VAT fraud that may have led to the situation at hand.

Creating bogus companies to seek rebates – this is when you, or others involved with you, create a series of UK and European companies who ‘pretend’ to make legitimate transactions with a view to loading the VAT bill. At the end, VAT is not returned to the HMRC and the businesses disappear

Asking customers to pay cash – this is so that they can avoid paying VAT either on a job or a sale of an item

Asking customers not to pay the business – requesting a customer to pay somebody else, or to make several payments to different companies or people

Not being registered for VAT – if you own a business, or you make over £85,000 a year as a sole trader, you are required to register for VAT.

Claiming to have applied for a VAT number – even if a person claims to have asked for a VAT number, but they haven’t got one, they are breaking the law.

Using a VAT number that is fake or belonging to somebody else – using a fake number or a number that isn’t yours is against the law.

Not paying VAT when you are required to is a form of tax invasion and taken very seriously by HMRC.

What happens in a VAT Fraud investigation?

A VAT fraud investigation is likely to start with the receipt of either a tax audit notice or a letter from the HMRC.  The letter will inform you whether a full tax investigation is taking place, or if there is a focus on one particular aspect.

As part of being VAT registered, there will be tax audits. These will also occur if you have employees who are paid through PAYE. Your processes and data will be inspected, and places where mistakes are typically made will have get more attention.

If you receive a letter about being part of a tax investigation, it’s time to take legal advice from experienced VAT fraud lawyers. Start with your accountant and then engage a VAT fraud solicitor. They will be able to help you with how to respond to questions from HMRC.

Being at the centre of a VAT fraud investigation can be frightening. You’ll wonder whether this will lead to you being imprisoned, for how long and what effect it will have on your family and business. You’ll most likely feel worried about what impact an outcome of this nature will have on your income and the long-term viability of your business. Will your dependents be able to pay bills, the mortgage and eat?

Every VAT fraud case is different, and it’s critical that you seek legal knowledge from an experienced fraud solicitor.

Have you been charged or arrested for VAT Fraud?

If you are charged or arrested for VAT fraud, then it’s critical that you prepare to undergo a police interview. You are entitled to bring a legal professional with you to the meeting and it’s essential that you do so.

VAT fraud is a severe criminal offence. It’s an area that hard to defend as it’s incredibly complicated. Only legal professionals who specialise in this area of law can provide a strong defence.

The two laws that VAT fraud charges are brought under are the Fraud Act 2006 and section 72 of Value Added Tax Act 1974.

When VAT fraud is suspect, an investigation takes place that is extremely thorough. It can disturb and disrupt the business to such a degree that lasting damage can be done to the reputation of the company.

It’s critical that you engage a VAT fraud solicitor who has recognised expertise in building strong defences in VAT fraud cases. Ideally, they will also have experience in tax fraud and other white collar crimes in the UK and depending on your situation, even cross-border fraud cases.

The legal professional you engage should be a solicitor who is capable of liaising with the:

Serious Fraud Office (SFO)

National Crime Agency (NCA)

Office of Fair Trading (OFT)

HM Revenue and Customs (HMRC)

Department of Trade and Industry (DTI)

City of London Police

The solicitor you instruct needs to have case building experience and a deep understanding of business VAT fraud cases.

You may have been falsely accused of VAT fraud

It’s possible that you may have been falsely accused of VAT fraud or business fraud. There may have been some confusion or a misinterpretation of the facts. If you feel this is you, it’s essential that you contact an experienced VAT fraud solicitor as soon as possible so that they can immediately start to look at how they can help you.

An experienced VAT fraud solicitor may even be able to get your case dismissed before it progresses to court.

You may have been arrested or asked to attend an interview with a tax inspector or the police.

We recommend that you do not attend an interview without engaging a legal professional who is a specialist in VAT fraud. You need to provide them with as much information as possible so that they can support you.

The interview will be very probing and you will be expected to provide information about your business and personal financial situation. Without knowing enough information, you may not say all the right things and may even say something that is used to incriminate you.

What should you do if you get arrested or charged with VAT Fraud?

In a crisis of this nature, it’s critical that you take advice and guidance from a specialist VAT fraud solicitor. Ideally, they will have experience in white-collar crimes and business fraud. If you decide not to take legal advice, you could be setting yourself up for imprisonment or a large fee, even if you aren’t guilty of VAT fraud.

In some cases, you may be accused or carousel fraud, which is when goods are brought into the country from an EU member state without VAT having been paid on them. The goods are then sold and VAT is charged. The person who traded them then typically disappears taking the VAT with them, without paying it to HMRC. Another term for this crime is ‘acquisition fraud’.

The UK authorities have a particular interest in carousel fraud and spend a lot of time trying to catch out those who are guilty of it. Huge gains can be made from this offence and it’s typical for the HMRC to accuse directors of legitimate businesses falsely.

Can the police search my home?

The police can search your home and your business as they will be seeking evidence to hold against you. The authorities will have granted access to your property, and the police will carry out the search.

Could you go to prison for VAT Fraud?

If your VAT fraud case reaches court, and you are convicted, you may be given a prison sentence.

We handle VAT fraud cases regularly. Using deep expertise, we can support the accused as they pass through the investigation process and the court appearance. We may even be able to influence the case outcome before it reaches the court if you get in contact with us early enough.

What type of sentence could you get for VAT Fraud?

If your case reaches court and you are convicted of VAT fraud, you may be sentenced for up to 10 years’ imprisonment and receive a fine. Furthermore, your assets will more than likely be confiscated. Read more information about sentencing for VAT Fraud

What mitigating factors may be considered in sentencing?

When a tax investigation takes place, it can typically expand as other areas of your tax affairs may also need to be examined. For example, corporation tax, personal tax and more. The role of the VAT fraud solicitor will be to guide you on what to do and say if you’re being asked for too much information from the HMRC.

Does a conviction for VAT Fraud go on your criminal record?

If your VAT fraud case progresses to court and you are convicted of defrauding the HMRC tax office, your conviction will be noted on your CRB / police record. The period of the endorsement will depend on the nature and length of your sentence.

How Can Stuart Miller Solicitors Help?

Our expert fraud solicitors are known for their strategic thinking and knowledge of the law concerning VAT fraud cases. We are aware of the crippling effects and devastating consequences of these investigations and will allocate a team of lawyers to apply defensive measures from the outset.

These investigations are lengthy, complicated and soaked in vast volumes of evidence. It is vital to have legal advice from the early stages as the investigators will usually apply for restraint orders to freeze your assets without notice. Such restraints could affect your home, your family and cause devastating losses to any legitimate companies caught up in the deal.

What will happen when I instruct a fraud lawyer?

Our VAT fraud solicitors have immense experience in handling business crime and dealing with international jurisdictional issues. We have a culture of pursuing every line of enquiry, whether in the UK or abroad. Motivated by the desire to achieve results, you will find our fraud lawyers eager to secure vital evidence and speak to witnesses right at the very outset. We are commercially aware, are familiar with different rates of VAT, understand the rates on different types of goods or services and those matters qualifying for exemptions.

Our fraud solicitors are especially trained on company law to understand the roles, responsibilities and mandatory duties of directors, shareholders and other officers of companies. We are prepared to scrutinise the network of UK and foreign companies, the large numbers of individuals, the enormous volumes of records and the highly likely computer/telephone evidence which will be essential features in your case.

Close relationships with phenomenal barristers and QCs allows Stuart Miller Solicitors to engage counsel from the very beginning of your case. We select barristers based on ability, legal knowledge and experience.

In circumstances where the impact of an investigation and prosecution will affect your future, your families’ future and that of your financial security; we bring to you a fraud defence team which is modern, dynamic, engaging and dedicated to helping. We don’t propose tired, old-school lawyers, out of touch with the changes in the law and developments in technological evidence likely to be a large feature in your case. We propose energetic VAT fraud solicitors, who practice exclusively in defence of VAT fraud cases, are up to date with relevant legal developments and desperate to find supporting factual evidence or legal arguments which could be the key to success.

Would you like to discuss your case before instructing us?

If you’d like to have a no obligation chat with us before you instruct us to take your case, then contact us today.

In addition to giving you a free consultation, we can also represent you at the police station if you’ve been arrested. We can look at securing your legal aid.

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