Tax Fraudster Ordered to Repay £100,000

44 year old Mark Phillip Harris from Ponteland, Newcastle upon Tyne has been ordered to repay £100,000 by Newcastle Crown Court for a sophisticated tax fraud. He was also sentenced to nine months imprisonment, suspended for two years and disqualified from being a company director for six years.

The court heard that Harris is the director of Bathroom & Tile (North East) Ltd, trading as DJM. Between 1999 and 2004, he carried out a number of deceptions which resulted in insufficient Tax, National Insurance and VAT being paid to HM Revenue & Customs.

Michael Heppell, Director of HMRC Criminal Investigations in Eastern England said:

'There has been a deliberate attempt on the part of Mr Harris to evade both his personal tax obligations and those of the company he controlled. The HMRC Criminal Investigation teams based in Leeds are specifically set up to investigate cases of this nature and to ensure that the Revenue and Customs Prosecutions Office has a really strong case against them in court. The verdict in this case and the financial recovery demonstrate that HMRC is increasing the number of criminal investigators it employs to ensure that more cases of this nature are investigated criminally.'

Harris extracted money from the company which he used to fund his own lifestyle and to pay cash to his employees and sub-contractors engaged to carry out work for the business. He prepared false invoices in an attempt to conceal the extractions and also failed to record cash received from customers in the records of the business.

As an employer, he failed in his obligation to operate Pay as You Earn (PAYE) on all the wages paid to his employees. He paid employees cash top-ups from which no Tax and National Insurance was deducted.

Harris also failed to operate the Construction Industry Scheme on all payments made to sub-contractors. This scheme requires a contractor to deduct tax from payments made to sub-contractors working within the construction industry. He engaged plumbers, electricians and joiners to carry out work for his company and failed to make the correct deductions from the payments he made to them.

Harris was arrested on 11th November 2004 and interviewed under caution. On the same day a search was conducted of his home address and business premises. Assistance in these matters was given by Northumbria Constabulary who obtained and executed search warrants. Harris was charged with five counts of Cheating the Public Revenue Contrary to Common Law and pleaded guilty to all five counts at Newcastle Crown Court on 19 April 2007.

The total tax loss to HMRC as a result of Mr Harris's actions is £97,161.18 plus interest of £2,838.82. Harris was ordered to repay £63,382.10 within 28 days. This money, subject to a restraint order, has been realised from the sale of his business premises. Harris must repay the remaining £36,617.90 within 12 months or face 2 years in jail. These funds are expected to be realised from the sale of his private home in an exclusive district of Newcastle.

In sentencing, His Honour Judge Lancaster said: 'This was a persistent and sophisticated fraud which you went to great lengths to conceal from HMRC and your own accountant.'

This case was successfully prosecuted by the Revenue & Customs Prosecutions Office (RCPO). RCPO is an independent prosecuting authority that reports to the Attorney General, and is responsible for the prosecution of all HMRC cases in England and Wales.