HMRC has sold five properties owned by two VAT fraudsters for around £7.5 million – including a £2.1 million luxury mansion.

Syed Ahmed and Shakeel Ahmad, both 51, were jailed for seven years in 2007 for their part in a £12.6m VAT fraud that saw 21 people receive prison sentences totalling 74 years.

Ahmed and Ahmad were jointly ordered by the judge to repay £16.1 million but the pair refused to comply with the court order and served an extra 10 years in prison instead.

Despite serving extra time in prison, the money is still owed and HMRC investigators continued working to hunt their hidden assets.

Mansion sold for more than double the guide price

The pair had tried to hide a luxury Buckinghamshire house by placing it under the ownership of an offshore company registered in the British Virgin Islands.

The mansion features two kitchens, five receptions rooms, five bedrooms and a sauna, and is set in 1.65 acres of English countryside. Receivers appointed by HMRC have now sold the property for £2.1 million at auction, more than double the guide price.

More than £10 million recovered

HMRC has clawed back around £10 million from Ahmed and Ahmad by identifying and seizing property they owned.

Nicol Sheppard, Assistant Director in HMRC’s Fraud Investigation Service, said: “This house sale is a great result for taxpayers and it shows our work does not stop with a prison sentence. It is our job to make sure taxpayers get their money back.

“We’ve recovered more than £10 million from these two men, and we’ll carry on looking for more assets. Any we find will be sold to recover the money they stole with interest.

“Anyone with information about suspected tax fraud can report it to HMRC online.”

Other properties Ahmed and Ahmad owned – and which HMRC has now sold – include:

  • A flat in Knightsbridge (£3.45m)
  • A house in Northwood, Middlesex (£1m)
  • A flat in Battersea Reach, London (£420,000)
  • A house in Langley (£660,000)

VAT fraud

Ahmed and Ahmad were responsible for VAT fraud as part of a Missing Trader Intra-Community fraud (MTIC) organised crime gang (OCG) they were members of.

Intra-community VAT is a set of rules that apply to cross-border activities in the EU. It means that when a company in the EU buys products from an EU supplier in another country, there is no VAT. But when the company sells the goods on to their customers, they add VAT to the sale price.

During MTIC fraud, the trader disappears without declaring the VAT or paying a VAT bill. Instead, they have pocketed the money and become a ‘missing trader’.

Our thoughts

While this case is extreme and clearly an act of criminality, it’s a reminder how far reaching HMRC’s powers are. These powers have widened over the years, not only in the criminal arena but also as they apply to civil matters.

It’s therefore important that taxpayers are aware of the rules and the consequences of not abiding by them, whether deliberately or because they don’t apply due diligence to their tax affairs.

While none of our clients would find themselves in the situation where HMRC would seize goods and sell them, it’s all too easy to find out something has been incorrectly reported or not reported at all. If that happens, they face interest and penalties of up to 100% of the tax for UK matters and potentially up to 200% of the tax for offshore matters.

Trusted UK tax advice

For specialist tax advice, chat to our team on 07813 434195 or email: stephanie.churchill@churchilltaxation.co.uk

Steph Churchill

Stephanie Churchill

Managing director & co-owner of Churchill Taxation