Clothing manufacturer convicted of VAT fraud
A COVENTRY clothing manufacturer, who created false invoices to steal more than £46,000 mainly through VAT repayments, has been sentenced to 18 months in prison suspended for two years following a successful HM Revenue and Customs prosecution.
Major Singh Phagura, aged 64, from Coventry, was arrested in 2013 when HMRC discovered he was writing out fake invoices for clothing material supplies which he never bought. Between December 2011 and March 2013 he passed these on to his accountant, who unwittingly claimed back VAT repayments.
Phagura, who ran Topmark Fashions Ltd, which made ladies and children’s clothing, initially denied fraudulent evasion of VAT when he appeared at Warwick Crown Court in September.
However, he reversed his plea to guilty at a later hearing when a handwriting expert brought in by HMRC confounded his claims.
Richard Wentel, Assistant Director, Fraud Investigation Service, HMRC, said: “From the outset Phagura knew exactly what he was doing was illegal. He fiddled his books using carefully crafted false invoices with the sole intention of lining his own pockets with money that should have been funding vital public services.
“His scam was flushed out by HMRC and now his dishonestly has been laid bare for all to see. HMRC takes tax fraud extremely seriously and anyone deliberately evading their taxes or making attacks on the UK’s tax systems could face prosecution.”
The fraud was initially unearthed by HMRC’s Midlands Ragtrade Taskforce.
The court was told repayments totalling £34,463 for the VAT period December 2011 to December 2012 were paid to Topmark Fashions. The submitted repayment of £10,084 for the VAT period up to March 2013 was not repaid by HMRC. For the same period, he should actually have paid HMRC £11,761 making the total value of the fraud £56,308.
In addition to the suspended sentence, Phagura also received a compensation order for repayment of the full amount he stole, including the first £10,000, within the next two weeks.
