HMRC report that an IT consultant who failed to declare almost £2 million of income received from an IT consultancy business, was jailed for 5 years today for tax fraud.
Stephen Maxwell worked as an IT consultant for London banks between 1999 and 2008. He ensured that his fees were paid to companies in Gibraltar and the Isle of Man of which he was a hidden beneficiary. From 2005 the income was paid to a UK registered company which never made any tax returns.
David Odd, HMRC's Assistant Director Criminal Investigation in Scotland, said:
"This was a case of deliberate and systematic fraud. The tax system depends on people being honest but Maxwell consistently tried to conceal his income.
“Income tax fraud is not a victimless crime and HMRC take a very serious view of anyone who acts in this manner. We have robust procedures to identify abuse of our tax systems and are committed to pursuing any such fraud vigorously.”
This case flags up a typical arrangement where fees are paid to an offshore company, with the expectation, over the passage of time of repatritating them, or even of retiring abroad. This has been heavily promoted across the IT and consulting industry as well as to trades over the last decade.