Insurance broker sentenced for false accounting

A partner at an insurance broker has been given a suspended sentence over a £48,620 tax bill related to pension withdrawals

Martin Wright 59, of East Lealands, a former partner at insurance broker Weatherbys Hamilton, narrowly missed out on jail time after failing to pay £50,000 in tax on a series of withdrawals from a pension totalling £121,000 and pleading guilty to false accounting at Gloucester Crown Court on 15 January.

Wright was given a 21-month sentence, suspended for two years and charged costs of £1,200 to be paid within three months.

Wright admitted to falsifying invoices, which were ‘misleading, false, or deceptive’. The court was told he did this to ‘gain for himself’ over a four-year period between September 2015 and August 2019.

Initially, Wright was standing trial for two charges of fraud and three for forgery but the prosecution offered him a plea bargain for a single charge for false accounting on the day of the trial.

Wright had withdrawn £120,000 from a personal pension which he claimed he would use to carry out urgent work on a property he owned through his self-invested personal pension (SIPP). At the time he was aged under 55 and was not eligible to withdraw the funds.

He faked invoices showing that contractors had been paid for work carried out on a building he owned in Gloucestershire that was rented out as a commercial property. The property was held in the SIPP and all income from the rent went into the pension fund.

In an interview with investigators Wright described the fraud and forgery he was being accused of as ‘a bit exaggerated’ the prosecutor, Simon Goodman, said in court.

Goodman said: ‘There was no work done to the property at all. He had lied to the SIPP scheme operators to get them to give him the money. He lied repeatedly.

‘Nine payments were made from the scheme for a total of £121,281 and he got it all tax-free and did not declare it on his tax returns.

‘The total amount of unpaid tax was £48,620 and there are now also penalties due to HMRC totalling £43,299 as well as interest, which is accruing. This was not a victimless crime - the taxpayer is the victim.’

Defending barrister, Edward Hetherington said: ‘When he was interviewed by HMRC in 2021, he was asked how the invoices came about and he said, “I am sorry to say I made them up in order to get money out of my SIPP.”

‘He said then that the work to his property was never done. He made up and printed the invoices.’

Instead of using the money for the work on the rental property, Wright spent the money on mortgage payments for his main residence, which the court said was valued at £900,000.

Judge Malcolm Gibney said: ‘It was a ridiculous gamble you took in seeking to withdraw from your SIPP. You took out significant sums of money over a four-year period to fund, it seems, your lifestyle and some remedial work to a property you owned.

‘You did it clearly aware that you were not entitled to it. It had gone into a SIPP which has tax advantages and you were not of an age to draw any funds, let alone the £120,000 that you did draw.

‘You have effectively lost to a multiple of ten times that which you avoided in terms of tax.

‘You are the author of your own misfortune.’

Will Drysdale |Reporter, Accountancy Daily

Will Drysdale is a reporter at Accountancy Daily - email news and leads to william.drys...

View profile and articles

3
Average: 3 (1 vote)

Rate this article

Related Articles
Subscribe