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Southampton Men Jailed For £600k Tax Fraud
Two Hampshire businessmen who ran pizza franchises in the south of England have been jailed for a £600,000 VAT fraud.
Mukesh Patel, 55, of Bassett Green Road, Southampton, and Harishchandra Desai, 61, of Exbury Road, Blackfield, Southampton, were franchisees of Pizza Hut UK Ltd and operated four takeaway restaurant outlets in Southampton, Poole and Bournemouth. The men traded as Pizza Delivery Services Ltd from October 2002 to September 2011.
HM Revenue and Customs (HMRC) investigators discovered that, although the company was registered for VAT, the men only declared takings from three of their four outlets. Figures for the Poole restaurant were not included on VAT returns.
HMRC criminal investigators worked closely with Pizza Hut UK Ltd to analyse sales data, and records revealed that Pizza Delivery Services Ltd suppressed the turnover figures from 1 July 2007 to 30 June 2010. There were differences between data supplied by the men to HMRC and that supplied to Pizza Hut UK Ltd, resulting in a VAT shortfall of almost £200,000. The pair failed to supply VAT returns for any of the restaurants from July 2010 to September 2011, resulting in a further VAT debt of over £400,000.
John Cooper, HMRC’s Assistant Director of Criminal Investigation, said:
“Desai and Patel ran four lucrative pizza franchises, but greed and a desire to fund their comfortable lifestyles and other business ventures led them to commit calculated VAT fraud over a number of years. We would like to thank Pizza Hut for their assistance and co-operation in bringing these men to justice.
“Our message to criminals is clear - it is simply not acceptable to steal from the tax system and, ultimately, every honest person in the UK. Anyone with information about VAT fraud should contact the Customs Hotline on 0800 59 5000.”
An earlier civil investigation by HMRC into Pizza Delivery Services Ltd found the men had submitted nine false VAT purchase invoices to HMRC between April 2005 and July 2007 to reduce the amount of VAT due.
The men pleaded guilty at Southampton Crown Court on 8 October 2013 to cheating the public revenue of £598,415 in VAT. They were sentenced at Southampton Crown Court on 20 December 2013.
Both men were sentenced to 18 months in jail, and will serve half in custody.
Upon sentencing, Miss Recorder Maria Lamb said:
“You knew your duty to make VAT returns and to account for the VAT collected. You also knew it was likely, due to possible insolvency, that you would not be able to pay. That conduct was dishonest.
“This was not a particularly sophisticated fraud, nor was it fraudulent from the outset, but it was fraud nonetheless.”
The men both used the proceeds of their crimes to enhance their lifestyles and business interests. Both men own Mercedes motor vehicles. Desai spent a great deal of money on the interior design of his home near the New Forest.
Confiscation proceedings and a review of the men holding company directorships will follow.
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