Manchester businessmen jailed for tax fraud

TWO Manchester businessmen, who lied about cash they had hidden in offshore bank accounts, have been jailed for tax evasion and fraud.

Roderick Smith, 44, of Wigan was jailed for 15 months at Liverpool Crown Court yesterday, while his partner Stephen Howarth, 44, from Hyde, was given 12 months.

They are directors and shareholders of Worsley-based Goldlogic Control Systems which offers computer technology expertise to the car trade. HM Revenue & Customs estimated they evaded £500,000 in tax over a six-year period.

HMRC said Goldlogic did much of its trade in Germany but the pair did not file a true account of sales and put profits into bank accounts in the Isle of Man. An investigation identified sales totalling £1.2m in Germany, while Goldlogic Control Systems only declared £49,650 of this money in sales for the same period.

Smith told HM Revenue and Customs (HMRC) that he had one offshore account when he was given the chance to come clean in an offshore disclosure campaign. He failed to mention 11 other accounts. Howarth also failed to mention any of the accounts.

The two men must pay back the money within 24 months or they will be jailed for a further 15 and 12 months respectively. Smith has already paid £40,000.

Smith was charged with four counts of fraud: three counts related to cheating the public revenue and one count of fraud by false representation. He pleaded guilty to one count of cheating the public revenue and the false representation charge. He was sentenced to 15 months jail for the cheating charge and three months for the false representation, to run concurrently.

The false representation count related to Smith’s failure to reveal full details of offshore accounts. Howarth was charged with two counts of cheating the public revenue and pleaded guilty to one.

Mike Preston, HMRC assistant director, criminal investigation, said: “Smith and Howarth stole from UK taxpayers, using the money that should have paid for public services to fund luxury lifestyles filled with prestige cars and expensive holidays.

“By failing to declare the true level of sales in Europe, and pay tax due on these earnings, they must now face the consequences of their actions in jail. HMRC is clamping down on tax evasion and targeting those UK taxpayers using offshore accounts to disguise their wealth.”