17 Jan 2014 02:48pm

Director hides in closet from HMRC

A London pensioner who hid in a wardrobe to avoid discovery by HMRC officers investigating a £0.5m VAT fraud has been jailed for four and a half years

Michael Kelly, 73, made false VAT repayment claims of more than £500,000 over a six-year period, claiming that his company exported white goods and motor vehicles to Africa.

If they had been genuine transactions these would have resulted in a VAT refund, but investigations revealed that his company, International Trade Centre (UK) Ltd of Dulwich, made only six small-scale exports in four years. In total Kelly submitted claims of £548,817 between 2006 and 2012, of which £500,367 was paid.

Along with his jail sentence, Kelly was also disqualified from being a company director for six years.

David Margree, assistant director at HMRC, said, “Michael Kelly was brazen in his attempts to obtain huge sums of money by fraud. He was less forthcoming, however, when our officers arrived to search his home. He was found hiding in a wardrobe in a vain attempt to avoid detection.

“Our enquiries revealed that Kelly had persistently submitted utterly fraudulent VAT repayment claims. We will continue to investigate fully and take the strongest possible action against those who defraud HMRC and law abiding individuals.”

Kelly had denied VAT fraud, but was found guilty after a three-week trial. Confiscation proceedings to reclaim the proceeds of Kelly’s crime are underway.

Helen Roxburgh


Related articles

HMRC misses targets on tax credit fraud

Resurgence in low-tech fraud

HMRC denies fraud fuelling VAT gap