Disqualified bosses jailed over £5m tax bill
4 Mar 2020
Two marketing company bosses, who had already been disqualified twice, and their financial director have been jailed after failing to pay HMRC over £5m in tax owed
4 Mar 2020
At Southwark crown court Gareth Onions pleaded guilty to breaching his directorship disqualification, multiple counts of cheating the public revenue amounting to over £2.6m and one charge of money laundering.
At the same hearing, fellow director David Webb pleaded guilty to one count each of cheating the public revenue of over £1.6m, breaching his directorship disqualification and money laundering.
During proceedings, the court heard that Onions and Webb bought a field marketing company in 1997, assisting consumer brands market and promote their products in retail outlets.
The marketing firm traded as The Brand Company and between 1997 and 2013 operated under the guise of seven different limited liability companies.
Glenn Delaney, the finance director throughout The Brand Company’s trading activities, pleaded guilty to one count each of aiding and abetting Onions and Webb in the breach of disqualifications and cheating the public revenue of £348,000.
An Insolvency Service investigation after the last of the seven companies, DSPS Field Marketing Ltd, went into Creditors Voluntary Liquidation in April 2013 discovered that Onions and Webb not only owed millions to HMRC but had also breached their directorship disqualifications.
Together with HMRC’s fraud investigation service, the Insolvency Service found that The Brand Company submitted their last annual accounts in 2002 before defaulting on their tax liabilities, resulting in a cumulative debt of more than £5m to HMRC, despite the fact the marketing company continuing to deduct tax and National Insurance from employees’ salaries.
To help hide their activities and to prevent any recovery action by their creditors, including HMRC, Onions and Webb repeatedly closed the operating company before purchasing the assets themselves through a new company in a succession of pre-pack administration deals.
This allowed the marketing bosses to start up all over again under a different name so that The Brand Company could continue trading undetected.
Further enquiries by the Insolvency Service, also found that the pair had both been disqualified twice while running the marketing company.
Webb received directorship disqualifications in 2008 for five-and-a-half years and a further five-year ban in 2010, while Onions was banned in 2010 for four years and another five-year ban in 2013.
The bans should have restricted their ability to manage limited companies but this did not deter Onions and Webb.
Throughout this period, not only did the marketing bosses keep the same workforce and deal with existing customers, the pair enjoyed substantial salaries and lavish expenses all billed to the company.
This included private healthcare, expensive company cars, golf club membership and the use of company credit cards for personal use.
Ian Hackett, Fraud Investigation Service, HMRC, said: ‘Onions and Webb deliberately stole taxpayer’s money to fund their lifestyle and showed a total disregard for their employees.
‘By working with partners such as the Insolvency Service, we can effectively tackle tax evasion, which deprives us all of money that should be funding our public services.’
Onions was jailed for five years and six months, while Webb was handed a term of four years and two months. Delany was sentenced to two years imprisonment, suspended for two years.
Glenn Wicks, chief investigator for the Insolvency Service, said: ‘Gareth Onions and David Webb employed duplicitous tactics for the majority of The Brand Company’s lifetime, in attempt to avoid paying tax, redress any losses owed to their creditors and comply with their disqualifications.
‘Thanks to the joint work with HMRC, the courts have recognised the severity of their unscrupulous conduct and their sentences should serve as a stark warning to others that we will investigate those that think they can flout their responsibilities as directors and enrich themselves at the expense of the public purse.’
The court also made an order for confiscation proceedings against all three men.