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Tax dodge businessman jailed

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A WIGAN businessman who set up offshore accounts in Mauritius to dodge paying hundreds of thousands of pounds in tax has been jailed.

Roderick Smith, known by his middle name, Iain, used his ill gotten gains to buy flash cars and fund luxury holidays, Liverpool Crown Court heard yesterday.

The high-level computer consultant, of Standish, who worked mainly in the car trade but previously worked on the computers which control the soup production line at Heinz, was estimated to have dodged £300,000 in income tax over a six-year period.

His business partner Stephen Howarth was also jailed for his part in the fraud.

Prosecutor Dafydd Enoch told the court how Smith and Howarth, both 44, paid more than £1.25m into offshore accounts in Mauritius and the Isle of Man at a time when the firm the duo ran in Manchester, Goldlogic Control Systems Ltd, declared profits of less than £50,000.

Each of the offshore companies, which the duo hid from their UK accountant, were afforded “tax exempt” status because they had not been set up as trading companies.

The court heard how Smith pocketed more than £600,000 from the accounts between 1998 and 2004 and Howarth more than £360,000.

Much of the cash was splashed on flash cars, landscape gardening and expensive holidays - including a £4,500 jaunt to Lapland.

But the pair were rumbled in early 2004 when the German tax authorities scrutinised the accounts of one of their best customers - who had made numerous payments into their offshore accounts.

The information was passed on to Her Majesty’s Revenue and Customs (HMRC), who launched an investigation.

Initially Smith tried to cover his tracks by claiming he had simply completed a one-off consultancy contract, but Mr Enoch told how, by this point, “Smith was up to his neck and told a series of lies”.

In interview Smith, of Duddon Close, Standish, claimed he had no idea he had to declare the offshore accounts to the UK tax authorities and said he spent most of his time abroad, mainly in Germany.

Howarth, of Orchard Rise, Gee Cross, Hyde, claimed the offshore companies had all failed and said they were nothing to do with the UK taxman.

Both defendants subsequently pleaded guilty to cheating the public revenue and Smith also admitted making a false representation to the authorities about the offshore accounts.

Andrew Lockhart, defending Smith, told how his client was so obsessed with his work for the likes of Volkswagen, Audi and BMW that he had taken his eye off the ball regarding his UK tax affairs.

He added that an immediate jail term would cause “serious and sudden ramifications”.

Richard Atkins, defending Howarth, said immediate custody would destroy everything his client had worked so hard for.

Judge Robert Warnock sentenced Smith to 15 months behind bars and ordered him to pay back £300,000 within two years or face a second 15-month jail term.

He jailed Howarth for 12 months and ordered him to pay back £200,000.

Judge Warnock told the duo, who were also each ordered to pay £5,000 towards prosecution costs, that their crimes were “motivated by greed and selfishness”.

He added: “You cheated the revenue and therefore this country by the evasion of income tax. You set up shell offshore companies in which you paid money, then drew down on the money in overseas bank accounts and remitted it in the UK.”

Speaking after the sentencing, Mike Preston, of HMRC, 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.”

 
 
 

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