Tax & Accounting News

Arrests In Construction Industry Tax Fraud Probe

23/09/2009

Officers from HM Revenue and Customs (HMRC) have arrested 21 people in dawn raids on a number of properties following an investigation into a £6million tax scam.

The so-called ‘missing trader’ fraud involved a complex chain of companies being set up which claimed to sub-contract labour to the construction industry. Tax and National Insurance (NI) contributions were deducted from workers’ pay packets but the companies disappeared before those payments were passed on to the Treasury.

As well as costing the Treasury money, this could also mean innocent workers losing their entitlement to certain benefits, as they would not be on record as having made the necessary NI payments.

The raids took place on 9 September at residential and business properties in London, Manchester, Staffordshire and the West Midlands, and 18 men and three women were arrested and questioned by HMRC criminal investigators.

Adrian Farley, assistant director of Criminal Investigation for HMRC, said: "These arrests are the result of strenuous efforts by our teams of dedicated officers to disrupt the sophisticated scams of organised crime gangs behind money laundering activities.

"This conspiracy by a number of contractors is believed to have resulted in the theft of over £6 million from the public purse, depriving vital public services of much needed investment. We are committed to bringing them to justice and to deprive them of the proceeds of their crime.”

Around £73,000 in cash has so far been seized, along with paperwork, computers, Class A drugs and associated equipment.