Ebay seller avoids jail after £200k tax fraud

Businessman Imtiaz Rashid’s attempt to purchase a house in cash led to HMRC’s discovery of his £200,000 tax fraud, Leeds Crown Court heard

Rashid had claimed he was earning £5,000 per year working part time at a bed factory, and failed to declare ‘substantial profits’ he was making from his online business selling women’s and children’s clothing through Ebay.

Suspicions were raised when he paid a £180,000 deposit for a house in cash, despite apparently having little income.

Police took no action regarding the property, but an HMRC investigation revealed Rashid had failed to accurately declare self assessment figures between 2009 and 2015.

The court heard had Rashid, of Batley, would have paid £69,523 in income tax if he had submitted accurate self assements.

It was also heard that Rashid and his wife applied for tax credits in 2004. Had HMRC known his true income, he would not have received £31,611 over that same period.

Alongside that, Rashid was registered for VAT and was issued with an estimated assessment, which he was to correct as his turnover changed. He did not do so, and in total should have paid £110,000 more than he ultimately did.

In all, Rashid’s offending totalled £211,789. He has repaid his debt in full with help from friends and family and admitted evading income tax and VAT and making false applications for tax credit.

He was given two years in prison suspended for two years with 300 hours’ community service, an electronic tag and curfew for five months from 7pm to 7am, along with an order to pay costs of £1,250.

Recorder Simon Jackson QC told him: ‘You should be ashamed of the fact that you have persisted for so long in this dishonesty.

‘You may be a hard-working man but you have been a fraudulent man working for yourself and now you have to pay something back to society.’

An HMRC spokesperson said: ‘Rashid showed total disregard for the tax system and stole money which should have been used to fund our public services. He thought his online trading would go unnoticed, but he was wrong and now he is paying the price.

‘Tax fraud will not be tolerated and we will continue working to level the playing field for honest, hardworking businesses to ensure they are not losing out to the tax cheats. We ask anyone with information about tax fraud to contact the HMRC Fraud Hotline on 0800 788 887.’

Calum Fuller |Assistant editor, Accountancy magazine (up to 2018)

Calum Fuller is former assistant editor of Accountancy magazine and Accountancy Daily, published by ...

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