Sub heading should read
HMRC want a pizza the action
A kebab shop owner who had sliced off a chunk of his takings and hid it from the taxman has been sent down for 30 months. Mehmet Tekagac, 43, of Viscount Road, Padgate, in Warrington, lied about his shop's takings as part of a £179,000 tax fraud. The fast food owner claimed he made around £9,000 a year from the Top Grill …
I understand that the checks are increasingly automated. Data on money flows is compared, the ins and the outs and if there is something out of kilter the name gets into the hat. If you make an allowed claim, e.g. personal allowance, perhaps tax free ISA income or as a business you claim legally allowed business expenses you will look OK. However, make some unallowable claim or do something that just does not stack up and you will be in trouble. I know a few who have been caught out over their business accounts not being right. So at the very least get a good accountant to control your excesses if you lack the skills to DIY correctly, that goes for private as well as business accounts.
A local story from the States: a secondary school Spanish teacher was embezzling school monies to fund her gambling habit at a nearby casino, specifically "penny slots".
She didn't even bother opening a second checking account to handle these funds.
Nor did she keep her classroom clean, where casino receipts were mixed in with the now-empty money envelopes from Homecoming ticket sales.
The sign of an addict: WAY too much of an evidence trail; easily found out. She didn't even THINK about getting caught.
the utter hypocrisy of a government stealing/ wasting billions and then spouting this off...
There are rightly big penalties for not paying it but seeming none for wasting it? Funny how it's "tax" on collection, "tax payer's money" at local government level but then suddenly it's "Westminster money" as soon as MPs get involved.
I really don't understand your message downvotes.
Not being funny, but this is the low-hanging fruit, surely?
A kebab shop only making £9k a year, are you kidding me? How do you even begin to claim that, you'd be out of business in a year easily when you were basically a one-man band making only £9k for yourself after a year's worth of work (i.e. not even minimum wage for YOU, let alone anyone else).
And if you were on HungryHouse / JustEat (which it sounds like), then they have records you can't hide. You put it in your bank, who would also give up that information. You claimed benefits (and they check all the above too).
Sure, maybe you got away with it for a while, but how can you think that being so blatant would work for any length of time? Literally ORDERS OF MAGNITUDE more money passing through your accounts than you were declaring.
I bet they've had you on their list for years, but just waited for a quiet day. "Oh, well, lads, we didn't get the mastermind criminal. I still wanna send SOMEONE down though. Let's go do that kebab shop, it's long overdue..."
"Tekagac is paying the price for thinking it was acceptable to steal from the public purse. He took his fraudulent income at the expense of honest taxpayers and businesses who play by the rules."
Closer to the mark...
"Tekagac is paying the price for thinking it was acceptable to steal from the public purse. He took his fraudulent income at the expense "of both" of the honest taxpayers and businesses who play by the rules."
ie, Not Apple, Not Google...
Few companies ever break tax law.
The problem you're referring to is actually "There is a law that let's us do this" or more commonly: "There is no law that stops us doing this".
When VAT law on products from Guernsey changed, Amazon were pretty quick to pay their bills and get out of there.
The problem is a taxation / benefits system that allows such things, which is the fault of supposedly intelligent people working for government, not the people who find the loophole (who are merely morally corrupt).
I was thinking the exact same thing - you're earning ~60k a year (based on the 180k mentioned in the article), so what are you going to try and ferret away from the tax authorities? 10k? 20k? 30k??? No i think I'll try and take 51k and claim I'm not earning enough to possibly cover my workplace expenses or home or you know inconsequential things like food and toilet paper.
Seriously if he'd tried to squirrel away that 9k and paid taxes on the rest he probably would have got away with it, but this, this is just stupidity on a Grand scale!
So, the fraudulent claims and tax evasion did him in.
What he should have done is to follow the big boys and gals and paid a hefty royalty on each kebab, packaging or whatever to his offshore company that holds the IP. Then pay the pittance of tax due in that jurisdiction for that income.
edit: Just seen comment by @Yet Another Anonymous coward - along the same lines
Well he has to buy his kebab meat from Switzerland for £100/lb, and he has to pay a fee to Kebab Shop Licensing inc (Bermuda) for each kebab he sells, and the sale didn't happen in the UK anyway because all kebab sales are booked through Luxembourg.
So really he makes a loss and has to claim a £9k a year subsidy
Not being funny, but this is the low-hanging fruit, surely?
Definitely. Anyone who has ever run a business will tell you that "profit" is a flexible fiction that can be manipulated for whatever tax purposes you want, because Profit = Income - Costs, and you can always crank up costs. Particularly if you have an imaginative company structure where one of your companies leases the premises to the other and pays a third to maintain them etc.
The only reason a business ever needs to make a profit is to pay dividends, which can only be done out of profit, as a tax saving measure since you don't have to pay National Insurance on dividends.
Sure, maybe you got away with it for a while, but how can you think that being so blatant would work for any length of time?
Criminals are stupid, generally. Someone I worked with was an accountant who had a number of clients in the self-employed/man-and-a-dog sector of the construction industry and she did their books for them. Every year she'd visit some of them now residing in various HMPs around the country to get them to sign off on their accounts for the previous year...
I once went on a HMRC investigation of a fish and chip shop. It was as simple as ordering a number of items and seeing whether it was put through the till, then while at the shop seeing how many other transactions were put through the till. They did this for a period of time with different 'customers' and then calculated the percentage of orders that did not make it to the till. Times this by the number of weeks/years they suspect it has been happening and within a few months the outlet was shut down.
I should think nowadays that it's just:
"Compare personal bank account income to business income and VAT paid" on a computer.
They do that for benefits already, they can literally look up all kinds of things about your income, outgoings, accounts, contracts, loans, etc. and spot discrepancies.
Obviously, they have to have a reason to look, so something obviously flagged on the system as suspicious or an anonymous report, etc., but they have it to look at and that's done long before they go see if the premises.
Hell, if you have a bill arrive in a new name at a premises where someone is claiming benefits, they can be informed and query whether you "live alone", etc. - my ex and I had that happen in the past.
As soon as they get a sniff, or a report, it's quite easy to prove things like this nowadays. It's hard to deal in or hide cash, even.
It might not be immediate and they rarely act straight away or tell you what's happened, but they can gather evidence enough in seconds.
They wouldn't get many sales when the Fanbois using their UK Stores discover that the Irish VAT rate has been applied rather than the UK one. HMRC would not be amused either. Unlike Google claiming that all their business was done in Dublin a physical transtaction for phycial goods is much harder to, cough, cough hide.
Now Corporation Tax payments are another issue entirely and Apple along with MS, Google and especially Amazon need to be brought to book pronto.
The first rule of being VAT registered is "you don't fuck with the VAT man".
The second rule of being VAT registered is "YOU DO NOT fuck with the VAT man".
Virtually nobody ever got jailed for swerving their PAYE / NI / Corp tax. Loads are in the clink for VAT.
What a trumpet.
I think everyone has acquaintances who we strongly suspect must surely be dodgy af taxwise, but living it large and not in jail. Buy-to-let landlords are the most obvious example. Taxman ignores them for years, and anecdotally I've heard people say they are tired of grassing people up to the HMRC hotline because nothing ever happens anyway. Then suddenly a random dodgy kebab guy gets hit. Wondering how it really works.
Easy, if you are small fry and have NO lawyers on call 24/7 or Big Mega Accountancy Company doing your accounts .... then you are somewhere near to the top of their list.
Everyone else, such as Google, Amazon etc get years to creatively sidestep the thing called TAX by gaming the situation across different countries borders and Tax rules with inter-company cross charging to muddy the water enough to obscure the real figures.
[Much like we all do .... don't we ???!!!]
When eventually HMRC grow some cojones, they have a nice 'off the record chat' with the company involved to advise that they will be considering looking at their tax arrangements sometime in the future and for the Company to get in touch when they are 'ready' to discuss their calculations.
[You can see the tough 'No Nonsense' stance that is taken by HMRC at once !!!]
Of course, this does not in any way give any advance warning to prepare/obscure the 'Case' and 'Tidy Up' the books.
Some months/years/decades later after discussions with the Lawyers and Big Mega Accountancy Company of the said 'Target', the HMRC decide to estimate a very small percentage of the Tax thought to be owed and issue this as a 'Full & Final' settlement of the disputed Tax Bill.
Not dissimilar to how we all pay our Tax, is it not !!! [Cough splutter]
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