Benjamin James Harbour, the director of a Watford company which sold Play Stations, has been disqualified as a director by the High Court for 12 years for allowing his company to participate in transactions linked to a fraudulent scheme to evade paying VAT.
Mr Harbours disqualification from 3 July 2013 means that he cannot promote, manage, or be a director of a limited company until 2025 and follows an investigation by a specialist team of the Insolvency Service, whose involvement commenced with the winding up of the company for unpaid VAT.
The court heard that Harbour Brands Ltd traded for four months in 2009 selling play-stations wholesale and that during this short period, bought goods VAT free from other European countries and charged VAT to a single UK customer, without making provision for payment of VAT to HM Revenue & Customs (HMRC).
The court also heard that the pricing of goods and the making of payments were clearly contrived, the most striking features were that all known trades were priced at a gross mark down in favour of this sole customer, with the VAT element offsetting this. Any remaining VAT monies were paid to overseas companies with no involvement with UK VAT.
While diverting all VAT monies, Mr Harbour signed false declarations to the customer that there were no reasonable grounds to suspect that the VAT monies on the goods supplied would go unpaid.
However, when HMRC called at the companys trading address in July 2009 there was no sign of any business and no VAT Returns were submitted to HMRC. Apart from a single email to the Insolvency Service in which he claimed to be moving around and of no fixed address Mr Harbour has disappeared in the face of tax, liquidation and disqualification proceedings and enquiries. The Insolvency Services investigations indicated in early 2012 that he was living in Spain.at an undisclosed location.
The price manipulation was an adjustment that would assist extended fraudulent trading, and the false representations would assist fraudulent traders involved further along the customer chain when faced with tax enquiries or seeking fraudulent VAT reclaims from HMRC.
Commenting on this case Paul Titherington, Official Receiver in the Public Interest Unit, said:
Harbour Brands Limited was involved as a missing trader in a type of VAT fraud which has been costing the UK Exchequer billions of pounds a year for the past decade.
This is not a victimless crime, the main impact being on honest tax payers and their families who are suffering the effects of funding shortages in healthcare, education and other front line services.
The Insolvency Service will not hesitate to use its enforcement powers to investigate and disqualify directors whose companies defraud the public purse.