Grocer who made sales of £1m sentenced for tax fraud
A Merseyside man who made a £1m in sales from his grocery shop but paid no VAT for four years has been sentenced for evading almost £69,000 in taxes.
David Leatherbarrow, 58, of Brentwood Avenue, Crosby, was the director of Festival Sales (UK) Ltd, a company which traded from a shop in Aughton, Ormskirk, Lancashire.
During routine visits, HM Revenue and Customs officers discovered the business was not registered for VAT despite weekly takings of about £20,000.
Leatherbarrow claimed the company had only been trading for six months, but HMRC investigators found the shop had been a going concern since 2012.
Sandra Smith, assistant director, Fraud Investigation Service, HMRC, said:
“Leatherbarrow lied about how long his business had been trading in a misguided attempt to evade paying VAT and penalties.
“We identified more than £1m worth of sales at this grocer’s over the fraud period. In the modern retail environment it is foolhardy to attempt to hide trading on this scale from HMRC.
“Evading VAT isn’t a victimless crime, it takes money out of the public services that everyone in the UK relies on to maintain a level playing field for local businesses.”
Three days after the HMRC visit in June 2016, Leatherbarrow changed the company’s sole directorship to himself. He later admitted the company had been in his son’s name to disguise his own involvement due to a chequered business past.
This fraud was discovered as part of the HMRC Grocery and Retail Trade Taskforce and the HMRC VAT Hidden Economy Team that check and audit local companies or self-employed individuals that attempt to evade taxes by concealing their business trading.
Leatherbarrow was sentenced to 16 months jail suspended for two years at Liverpool Crown Court.
He was also electronically tagged, issued with a curfew for six months and has to do 150 hours community work. HMRC will now begin work to recover the unpaid VAT plus any penalties.
