Warning issued to VAT cheats

Date: 2nd February 2010

The consequences of trying to exploit the VAT system have been highlighted this week after three men were imprisoned for a £16 million fraud.

Businessmen Costas Sophocleous and Philip Foster, along with accountant Stewart Collins, were given sentences of eight years three months, five years three months and six years respectively, after an HM Revenue & Customs (HMRC) investigation uncovered the VAT fraud which had funded their "lavish" lifestyle.

Clive Cottrell, assistant director of criminal investigation for HMRC said: "VAT fraud is not a victimless crime and we take a serious view of people robbing the public purse.

"Our investigators work tirelessly to pursue those who commit such fraud and these sentences will serve as a deterrent to anyone considering committing tax fraud."

The trio were jailed for Cheating the Public Revenue contrary to the Common Law after reclaiming VAT for purchases and expenses related to construction projects.

However, the HMRC investigation found "no evidence" that any such work took place.