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Help needed

Can someone help please. I am a reasonably regular poster on this site but have registered anonymously because of the following:

I have recently discovered my employer has been submitting false vat returns on behalf of the business and several clients, whilst not as obvious, apparently there has also been fraudulent transactions with regard to PAYE liabilities, namely using a relatives tax code to pay staff cash. Obviously I am leaving, but I believe I have a duty to report this, it brings us all into disrepute if I allow this to go on. I know I could report this through the tax evasion phoneline but I would prefer to talk to a HMRC compliance officer direct. Can anybody help? perhaps david/malcolm/euan? Please no posts about I could be mistaken, I am 100% certain about my facts and have the information to back this up.

I know this is a difficult situation I'm sorry to burden the community with this but I could really do with some help.

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03rd May 2012 19:35

David Winch would be your best guide on this.

I don't think anyone else would be able to help.

If David doesn't spot your post you could maybe PM him. He helps lots of people on here in regard to Money Laundering, although I cannot guarantee he will, or can, help in your particular circumstances.

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By polaris
03rd May 2012 19:42

re David winch

Thanks shirley I will try to find him, a lot of years in practice and this is a first, you live and learn!!

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03rd May 2012 20:16

If you are a member of a professional body such as ICAEW they should be able to help with who to report to. Otherwise if your employer is a member perhaps you could try asking the same without giving details of the person you are talking about in the first instance.

 You probably also need to see a lawyer as the position you are in with feeling forced to leave could amount to constructive dismaissal I would think. Maybe legal advice could help you with both.

Sorry this doesn't actually give you an answer.

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By polaris
03rd May 2012 19:59

Patricia

Thanks patricia, I am not a member of ICAEW I have tried discussing it with the body my employer is a member of but no joy. Thank you regarding comments re constructive dismissal I have spoken to a solicitor regarding this ( he is a friend) it's so difficult to prove he will represent me if necessary, I'm not really bothered about that angle, I am disgusted that a member of our profession could stoop so low, if we can't be honest who can?

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04th May 2012 09:56

Reporting

Hi

You are in a difficult situation and have my sympathies.

I take it that your employer is a member of a recognised professional body of accountants and you are not a member of that body.  It follows that you are not under an obligation to report it to the body of which your employer is a member (since, not being a member yourself, you owe no duty to that body).

I think it is unlikely that you are under a duty to report this to any body of which you are yourself a member (since you are making no allegations against anyone who is a member of 'your' body).

However it might be wise to seek confidential ethical assistance from 'your' body at this stage - most bodies have a confidential ethical 'help line' for members.

You may need to keep some notes / records now so that in future you are not relying on your memory.  Also your notes will show if further information comes to light later just what you did (and did not) know at this stage.

Make a note now of your reasons for doing whatever you choose to do.

At some future time it could be suggested that it is in fact you who is the 'bad guy' acting dishonestly and that you have duped your employer and chosen to leave now because you feared being found out if you stayed.  Your notes and records will assist you in showing that is not the case.

I assume you / your employer are in England & Wales (the law is different in Scotland for example).

I believe you have a reporting obligation under s330 PoCA 2002 / MLR 2007 because information has come to you in the course of your professional work causing you to suspect that someone has obtained a benefit as a result of criminal conduct.

Ordinarily you would report to your employer's Money Laundering Reporting Officer (MLRO).

In this case that may not be appropriate because you have no confidence in the honesty / integrity of the MLRO or you fear that he would not take appropriate action (or would take inappropriate action).

In these unusual circumstances you can (and should) yourself file a report directly with SOCA.

Ordinarily I would advise doing this online.  It is a bit cumbersome because you first have to register yourself with SOCA (much like when setting up online tax return submissions).  However if you file online this does generate an automatic email acknowledgement (with a reference number and date) which you may wish to have.  If you file by post or fax you are unlikely to receive any acknowledgement at all (and in the circumstances you may want evidence that you reported your suspicions to the authorities at this stage).

The SOCA website at www.soca.gov.uk is out of service at present due to a DDoS (distributed denial of service) attack - apparently in retribution against SOCA's recent actions against cyber criminals!  So you are probably going to have to wait until next week to file a report.

For obvious reasons when setting up your 'account' up with SOCA do NOT provide your work email address (because the acknowledgement will be sent to the email address which you provide)!  Similarly give your home address and phone number rather than your office one (of course in the report itself you will identify the office as a 'suspect').

I hope this helps a bit.

David

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By polaris
04th May 2012 10:03

Re reporting

Thank you David, your advice is greatly appreciated.

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04th May 2012 13:47

SOCA website

The SOCA website appears to be up and running again.

There is a small link on the top right of the home page "Reporting SARs" which you need to follow to file a report online.

David

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By polaris
04th May 2012 14:22

soca website

Thanks once again, I will let you know how I get on

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09th May 2012 12:59

historical comment

I had a client situation very similar to this in pre MLR days.

The managing director had been paying himself an additional salary but showing it on an employees payslip to utilise his basic rate band. Obvioulsy he never quite got around to issuing payslips etc.

Unknown to the director the employee had rental income and completed a tax return.

The resultant enquiry into "undeclared employment income" resulted in a free holiday at HM expense.

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09th May 2012 14:37

False VAT returns

I think one of the problems with reporting to SOCA is that HMRC do not have the resources to investigate every disclosure.

I can put you in a touch with a senior HMRC tax investigator who will deal with the matter sensibly. However you need to be aware that if HMRC decide to adopt the 'case' it will, if the tax loss is of a reasonable amount, investigate the matter as a criminal case. HMRC would normally investigate accountants and tax advisers on a criminal basis rather than a civil basis.

Criminal cases tend to be very lengthy. HMRC would want to use you as an informant/witness on the basis that you may be able to point them in the right direction in providing documentary evidence. They would prefer you to be a witness which could lead to you giving evidence in the Crown Court which can be very stressful and time consuming. It may be difficult for them to treat you as an informant due to your knowledge of the 'fraud'. It is correct as David Melia implies that HMRC do pay informants but it is usually in quite small amounts.

Obviously a difficult decision for you to make and you may be more content to follow David Winch's advice to make a SOCA disclosure and just leave it at that.

However if you wish to discuss it further  -please contact me -my telephone number and e-mail contact address is on my website

Malcolm McFarlin

www.mandrtaxadvisers.com

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09th May 2012 14:52

erm that's not what i meant

Free holiday at HM expense = jail :)

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