"his was a disgraceful attack on the VAT repayment system"
Harinderpal Singh Lotay, from Moseley in Birmingham, has been convicted of committing serious VAT fraud when he tried to steal over £97,000 in false repayment claims.
Lotay aged 39, ran a company called Tiger Blue Consultants Limited, from which he submitted VAT repayment claims between 2010 and 2012 using 55 false invoices for three construction companies.
He was investigated by the HMRC. They found that Lotay, of Mackenzie Road, Moseley, made the false VAT claims for the three companies which all had the same abbreviation name of TBC.
Lotay had already received the sum of £38,902 for his VAT repayment claims at the point when the investigation started.
The HMRC held back £58,967, which was the remaining amount, immediately when they started looking into Lotay’s VAT affairs.
As part of his business operation, Lotay was paying himself a modest salary from Tiger Blue Consultants, which was one of the companies.
However, in 2012, when Lotay received the large HMRC VAT repayment from his false claims, he gave himself a generous bonus which increased his monthly salary to a sum over £15,000.
Before his sentencing date, Lotay, who is not working, paid back the money to the HMRC that he had received from the false claims.
However, for his offences of VAT fraud, Lotay was given a two-year jail sentence suspended for 15 months at Birmingham Crown Court on Friday, August 24, 2016.
He was also ordered to do 180 of unpaid work and pay court costs of £1,500.
Judge Henderson who sentenced Lotay called him “cunning and devious”.
The Assistant Director of HMRC’s Fraud Investigation Service, Paul Fisher said:
“This was a disgraceful attack on the VAT repayment system. Lotay stole money from other taxpayers and used it to dramatically increase his own monthly salary by more than 20 times.
“This case should serve as a warning to anyone who is tempted to abuse the VAT system that we are always checking.
“We will prosecute anyone who thinks they can steal money paid into the system by honest, hard-working taxpayers.”
“VAT fraud is a serious crime and I would ask anyone with information to report it to us online, or to contact our Fraud Hotline on 0800 788 887.”
Lotay has narrowly escaped jail with the suspended sentence but VAT fraud like any other kind of tax fraud, as this case shows, is a priority for the HMRC, as part of its duty to protect the public purse.