Accountant’s motor racing tax fraud spins off track

An accountant who hid the profits of a Cardiff motor racing business in a £140,000 tax fraud has been jailed.

HM Revenue and Customs (HMRC) investigators discovered that Michael Jones, 60, the company secretary of Nick Jones Racing Ltd (NJR), hid the true income of the business. He also encouraged other companies to commit VAT fraud by participating in an advertising “tax saving scheme”.

Zoe Ellerbeck, Acting Assistant Director, Criminal Investigation, HMRC, said:

“Michael Jones operated a scheme where he directly encouraged clients of his accountancy business, J&R Business Services Ltd, to advertise with NJR in order to commit VAT fraud. He also deliberately misrepresented NJR’s income to pocket tax that should have been paid to HMRC.

“We are investing more resources than ever into tackling tax fraud and will not hesitate to investigate those who cheat the system and other law abiding people.”

HMRC officers found that Jones invited 12 companies, most of them local, to purchase advertising on NJR’s race cars and website. The advertising did not materialise, but the participating companies falsely reclaimed the VAT. The directors and sole traders were also personally reimbursed with a gift of “tax free” money.

Jones profited himself by falsifying the company accounts. He failed to show the real income of the business, and when sponsors made payments to NJR, the money was often quickly transferred to his personal bank accounts within 24 hours.

Michael Jones appeared at Cardiff Crown Court today (Friday) and was sentenced to 32 months imprisonment. He had admitted cheating the Revenue, VAT fraud and money laundering at a previous hearing.

At sentencing, His Honour Judge Curran told Jones that the fraud was “carefully considered and constructed” and “designed employing your expertise as an accountant.”

Notes for editors

1. Michael George Jones, DOB 02.01.53, of Mill Lane, Castleton, Cardiff.

2. Jones admitted two counts of cheating the Revenue, two of transferring criminal property, and one of VAT fraud at a previous hearing. He was sentenced at Cardiff Crown Court today to 32 months imprisonment, and disqualified as a director for five years.

3. The total tax loss is £140,625.

4. HMRC is currently running the second stage of an evasion publicity campaign, through a series of targeted advertisements including radio advertising and over 3,000 billboards in public areas. The campaign works alongside existing compliance activity such as data collection, taskforces and enforcement to raise awareness among those breaking the rules that HMRC is closing in on undeclared income.

5. Follow HMRC on Twitter @HMRCgovuk

6. HMRC’s Flickr channel www.flickr.com/hmrcgovuk