Clothing chain boss jailed for VAT fraud

An 18-month jail term has been imposed on the managing director of a clothing chain, who failed to pay his VAT in full and pocketed almost £68,000 in tax and national insurance contributions deducted from his employees’ wages.

Kamal Gediz, 49, appeared for sentencing at Canterbury Crown Court on 17 May after pleading guilty to the offences on 9 April 2013.

Upon examining the accounts of Punkyfish (GB) Ltd – the name under which Gediz traded clothing – HMRC found that between £300,000 and £500,000 in VAT had been avoided through Gediz deliberately under-declaring sales.

David Margree, assistant director for Criminal Investigation at HMRC, said that Gediz’s idea of getting ahead in business was to falsify his accounts and steal from his own employees.

‘In doing so he deceived not only HMRC and his staff, but also the thousands of businesses that operate honestly and within the law.

‘HMRC will thoroughly investigate suspected tax fraud, and bring enforcement action against those who cheat the system,’ said Margree.

In May 2011, Gediz submitted a VAT return for Aliko Ltd showing sales of £1.2m for the 18 month period starting in November 2009. HMRC subsequently made a visit to Gediz and discovered paperwork showing that sales were in fact £7.3m, some £6m more than he had declared.

Gediz’s lies resulted in a VAT underpayment of a sum estimated at between £300,000 and £500,000.

But further checks revealed that Gediz had also failed to file any tax forms or pay the PAYE and NIC he had deducted from the salaries of approximately 70 staff, totalling around £67,600.

Via Clothing chain boss jailed for VAT fraud | Accountancy Live.

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