Restaurant owner jailed for £1m tax fraud
24 Dec 2018
A Chinese restaurant owner, who evaded more than £1m in tax by claiming his business made pottery and had a tiny turnover, has been jailed for three years, following an HMRC investigation
24 Dec 2018
Chin Lam, 60, from Barnet, north London, owned outlets in North Greenwich and at Gun Wharf Quays shopping centre in Portsmouth, Hampshire. He failed to declare cash payments, resulting in his failure to pay £1,018,508 due in tax.
Both businesses used a similar scam when they opened. In North Greenwich, the Water Margin restaurant registered for VAT in April 2013 and was described as ‘manufacturing pottery with an estimated yearly turnover of £10,000’. The actual annual turnover was £5.1m.
In Portsmouth, the Water Margin registered as an art illustration company with a turnover each year of £10,000. The reality was between February 2013 and March 2016 the figure was £5.3m, HMRC found. The restaurant went into liquidation in September 2016.
Lam declared just £2,100 in self assessment income between December 2014 and November 2016 despite being a director of both restaurants.
HMRC officers swooped on the North Greenwich outlet a month after a new company took it over in February 2017, and the owners had mirrored the behaviour of the other companies – being listed at Companies House as being an ‘artistic creation’ company. Tax official said Lam was pulling the strings of the new company from the sidelines, but it never traded.
He was arrested on 10 March 2017 and the North Greenwich outlet and his home were both searched that day. Lam admitted VAT fraud and money laundering and was subsequently sentenced to three years in jail at Harrow Crown Court.
Confiscation proceedings to recover assets will now begin.
Richard Wilkinson, assistant director, fraud investigation service, HMRC, said: ‘Lam made millions and paid very little tax, rubbing law-abiding taxpayers’ noses in it. The cash he pocketed was the equivalent to the starting salary of 130 new nurses in London for an entire year.’
Report by Pat Sweet