According to HM Revenue & Customs, Roderick Smith of Wigan in the UK, said he had only one offshore account while using HMRC’s Offshore Disclosure Facility in 2007 and failed to mention 11 further accounts. HMRC said Smith’s business partner Stephen Howarth also failed to disclose any of his accounts during the campaign.
The two men ran a company offering computer technology expertise to the car trade, with many customers based in Germany. But the pair did not register their true level of sales with HMRC and instead put their profits in bank accounts in the Isle of Man. Alerted by the German tax authorities, HMRC investigators discovered that, over a six-year period, the men evaded around £500,000 in UK income tax.
HMRC investigators identified sales totalling £1,255,615 in Germany, while the company the pair ran in Manchester, Goldlogic Control Systems Ltd, declared only £49,650 of this money in sales for the same period. The balance was siphoned off into the offshore accounts of five shell companies registered in Mauritius and the Isle of Man, created by the directors solely for the purpose of tax fraud.
HMRC said both men had the opportunity to disclose their offshore accounts through the ODF in 2007 but that Howarth did not register for the OFD, while Smith did register but then disclosed only one of the 12 accounts he controlled overseas.
Smith was jailed for 15 months and Howarth for 12 months. Confiscation orders were issued under Proceeds of Crime legislation in respect of Smith for £300,000 and Howarth for £200,000. They must pay within 24 months or they will be jailed for a further 15 and 12 months respectively. Both men must pay £5,000 court costs. Smith has already paid £40,000 under the OFD scheme.
