Construction director jailed for £1.3m tax fraud

2 October 2017

The director of a construction payroll business has been jailed for a £1.3m VAT fraud.

Paul Marsh, from Dudley in the West Midlands, was given a sentence of four years and three months after being investigated by HM Revenue & Customs (HMRC).

He admitted making three fraudulent VAT declarations to HMRC for his company Draco Consulting Services which reduced the amount of tax owed by £1.3m. He used the money he stole to prop up his other company, Marlin Resources, which was in financial difficulty.

Jailed: Paul Marsh

Marsh owned and operated both companies based in Dudley, which provided payroll services to self-employed tradesmen working locally in the construction industry.

Investigators uncovered evidence from the bank accounts of both companies proving that Marlin Resources had not paid all of the VAT it owed, and that Draco Consulting Services was never in a position financially to pay the tax it owed. The total value of the fraud was £1,337,311.97.

Although both companies went into voluntary liquidation in December 2008, investigations discovered that £150,000 had been transferred to another company, which Marsh was also a director of.

He had pleaded guilty to conspiracy to cheat the public revenue contrary to Section 1 (1) Criminal Law Act 1977 on 6 October 2016 at Birmingham Crown Court. Draco Consulting Services was registered for VAT between August 2007 and December 2008.

Richard Young, assistant director, HMRC fraud investigation service, said: “Marsh was naive to think he could get away with this fraud. He was using the tax system like a private bank loan, to prop up his second business, which was struggling financially.

“By depriving public services of vital funding, financially he had an unfair advantage over honest competitors. HMRC is levelling the playing field for honest businesses and making sure that crime doesn’t pay.”

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