In a warning to all business owners, a company director has been slapped with a 15-year ban after submitting falsified bank statements.
HMRC has named and shamed a music producer who falsified bank statements to secure a £150,000 government-backed loan and VAT refund of almost £180,000.
The Insolvency Service reports that Felix Milton has been banned from acting as a company director for 15 years in a lesson to anyone considering fraud.
It adds that the company director of The Nameless Ltd. “…altered several documents to show millions of pounds in his company account when the true balance was as little as £3.20, and created fake invoices to support the claims.”
The service explains: “In the falsified statements, transaction amounts were inflated, payments to personal accounts were deleted, and balances were increased to show sums in the millions rather than the actual figures of hundreds or low thousands of pounds.”
Milton’s business was wound up in August 2022. Before this, in autumn 2021, he received a loan and a VAT refund using false records. His actions were picked up on when the 43-year-old attempted to secure £4.3m in VAT refunds, again using falsified invoices.
Victoria Edgar, Chief Investigator at the Insolvency Service, said: “The business community and wider public deserve protection from those who demonstrate that they are wholly unfit to act as company directors.
“Milton’s ban runs until November 2040, reflecting the severity of his dishonest conduct.”
Warning for company directors
As well as receiving the maximum ban from being a company director, Milton has also been ordered to pay costs of £10,826.
The statement from HMRC adds that Milton has “…failed to accept responsibility for his actions during the investigations” and “…initially blamed a deceased business partner for creating the false documents, despite being the sole director responsible for the day-to-day running of the company and the sole signatory on the bank account”.
The decision to publish details of the case comes at a time when HMRC is making reforms, which it argues will make it harder for fraudsters.
The Making Tax Digital roll-out over the next few years is key to this; but there have also been changes made by Companies House for business registrations and ID verification. The latter is as a result of the Economic Crime and Corporate Transparency Act (ECCTA). This was passed by the previous Government and specifically aims to tackle fraudulent business registrations and improve corporate transparency.
By digitising businesses’ relationship with HMRC, the Government says that fraud will be picked up far quicker. While the majority of businesses are working completely to the letter of the law, the changes do require planning and compliance.
While HMRC has published this sad story as an example to those considering tinkering with their tax records, it also is a wider lesson to all business owners to make sure they are on top of MTD and any other statutory, regulatory requirements.
