A Rochdale clothing wholesaler has been sentenced for forging documents to steal almost £120,000 in VAT repayments.
Abdul Majeed, 42, former company secretary of Rochdale fashion firms Majtex Limited and Majtex International Limited, submitted false invoices to fraudulently reclaim £119,624 in VAT repayments but £14,353 was withheld.
An investigation by HM Revenue and Customs (HMRC) revealed Majeed used legitimate suppliers’ invoices as templates to create false sales and purchase documents. He then used the fake invoices as evidence of supposed additional UK and overseas sales and purchases.
HMRC officers raised concerns about the invoices and alleged overseas sales and Majeed was offered the opportunity to disclose any tax irregularities within 60 days, which is known as a Contractual Disclosure Facility. He ignored the offer so HMRC launched a criminal investigation into the clothing firms and the suspected VAT evasion. Shortly after, Majeed deregistered Majtex International Limited for VAT.
Paul Maybury, Assistant Director, Fraud Investigation Service, HMRC, said:
“Majeed has finally admitted his crime and is paying for his greed. He had the opportunity to put his tax affairs in order and not be criminally investigated, but he ignored HMRC and now has a criminal conviction for tax evasion. If HMRC had not stopped the fraud, Majeed would have continued to steal from the public funds we all rely on. We encourage anyone with information about suspected tax fraud to report it online or contact our Fraud Hotline on 0800 788 887.”
Majeed admitted VAT fraud at Manchester Crown Court on 3 April 2018.
Sentencing was adjourned after Majeed committed to pay back £10,000 by the end of April 2018 and make continued monthly payments.
He was sentenced today (9 October 2018) to a two-year suspended jail sentence, 150 hours community service, and a compensation order of £70,271 at the same court. He was also ordered to pay costs of £3,000. Majeed has repaid £35,000 so far and was ordered to complete the payments within the next 18 months.