01/03/23

Alleged MTIC Fraud

Share

Kangs Solicitors has been instructed to defend claims against our client alleging breaches of Section 212 and 213 of the Insolvency Act 1986.

The claims are being brought by the joint liquidators of our client’s company on the basis that our client allegedly knew that he and his company were participating in Missing Trader Intra- Community’ Fraud’ (‘MTIC’) and caused the company to become liable to HMRC for a misdeclaration penalty and unpaid VAT.

MTIC fraud involves an artificial and manipulated form of ‘trading’, designed solely as a means of stealing VAT from HMRC

The activities of companies involved, whilst ostensibly legitimate, upon investigation carry little or no resemblance to legitimate trading. The artificial ‘trade’ frequently engages foreign, but unnecessary  trading to take advantage of differing tax regimes, and the ‘carousel’ of artificial and worthless invoices presented to HMRC.

Tim Thompson of Kangs Solicitors outlines the nature of this claim.

Anyone who is, or anticipates becoming, the subject of an investigation or court proceedings in respect of insolvency proceedings of any nature should seek immediate guidance and advice from professional experts.

The award-winning Team at Kangs Solicitors is nationally recognised for its work in fraud investigations and court proceedings, whether they be civil or criminal in nature. 

For an initial no obligation discussion, please contact our team at any of the offices detailed
below:

0207 936 6396

0121 449 9888

0161 817 5020

07989 521210

London

Birmingham

Manchester

24 Hours number

The Circumstances | HMRC High Court Claim Solicitors

The circumstances leading to this claim are:    

  • our client was a director of the company
  • the company traded in mobile telephones and CPUs
  • the company submitted returns to HMRC incorporating significant repayment claims for VAT
  • HMRC denied those repayment claims alleging that the company was involved in MTIC fraud
  • those decisions were appealed by the company and ultimately heard by the Upper Tier Tax Tribunal
  • eventually, the company was placed into Compulsory Liquidation

the joint liquidators, following an investigation, have issued proceedings against our client for alleged breaches of Section 212 and 213 of the Insolvency Act 1986.

The Relevant Law | Kangs Insolvency Solicitors

The Insolvency Act 1986 provides:

Section 212:

Summary remedy against delinquent directors, liquidators, etc.

(1) This section applies if in the course of the winding up of a company it appears that a person who—

(a) is or has been an officer of the company,

(b) has acted as liquidator . . . or administrative receiver of the company, or

(c) not being a person falling within paragraph (a) or (b), is or has been concerned, or has taken part, in the promotion, formation or management of the company,

has misapplied or retained, or become accountable for, any money or other property of the company, or been guilty of any misfeasance or breach of any fiduciary or other duty in relation to the company.

(3) The court may, on the application of the official receiver or the liquidator, or of any creditor or contributory, examine into the conduct of the person falling within subsection (1) and compel him—

(a) to repay, restore or account for the money or property or any part of it, with interest at such rate as the court thinks just, or

(b) to contribute such sum to the company’s assets by way of compensation in respect of the misfeasance or breach of fiduciary or other duty as the court thinks just.’

Section 213:

Fraudulent trading.

(1) If in the course of the winding up of a company it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person, or for any fraudulent purpose, the following has effect.

(2) The court, on the application of the liquidator may declare that any persons who were knowingly parties to the carrying on of the business in the manner above-mentioned are to be liable to make such contributions (if any) to the company’s assets as the court thinks proper.’

Who Can I Contact For Help? | Kangs Criminal and Civil Fraud and Insolvency Solicitors

The Insolvency and Tax Litigation Teams at Kangs Solicitors are highly experienced defending claims brought by liquidators on behalf of HMRC, as well as representing clients in respect of investigations conducted by HMRC (civil and criminal).

If we can be of assistance, our Team is available via telephone 0333 370 4333 and by email info@kangssolicitors.co.uk.

We provide initial no obligation discussion at our three offices in London, Birmingham and Manchester.

Alternatively, discussions can be held virtually through live conferencing or telephone.

Contact:

Hamraj-khan

Hamraj Kang

Email Hamraj

07976 258171

020 7936 6396

0121 449 9888

John Veale

Email John

0121 449 9888

020 7936 6396

0161 817 5020

Stuart Southall

Email Stuart

0121 449 9888

020 7936 6396

0161 817 5020

Tim Thompson

Email Tim

0121 449 9888

020 7936 6396

0161 817 5020

News insights, Serious Fraud, Services
A former Labour MP, Jared O’Mara, has received an immediate custodial sentence of four years having been found guilty, following his trial, of six counts of fraud relating to false expenses claims for work that he never carried out in respect of jobs that did not even exist. For further Press details please follow the […]
07/03/23
Criminal Litigation, News insights, Services
Kangs Solicitors has recently successfully defended a client facing an allegation of assault occasioning actual bodily harm arising from an incident forced upon him whilst he was simply conducting his  business, running a restaurant in London’s West End, when confronted with an unsavoury situation. Kangs Solicitors was instructed from the onset attending the interview under caution at Charing […]
06/03/23
Financial Investigations, Services
By virtue of The Proceeds of Crime (Money Laundering) (Threshold Amount) Order 2022 the threshold amount specified in section 339A of the Proceeds of Crime Act 2002 (‘POCA’) increased from £250 to £1000 on 5 January 2023. The threshold amount is the value of criminal property below which a bank or similar firm (a deposit-taking body, electronic money or payment […]
22/02/23

Get in touch