9am Lowdown: Tax fraud couple sentenced

iStock_paper people_Eduardo Fuentes Guevara
Managing Editor
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Good morning and welcome to the 9am Lowdown. Today’s headlines include the financial secretary on Making Tax Digital, a fine for Moore Stephens and a tax fraud couple sentenced.

Landlord tax fraud couple sentenced

An Uxbridge couple who kept their £1.2m property profit a secret from HMRC have been found guilty and sentenced for tax fraud.

Savita Seth, who worked for HMRC while committing the offences, with her husband failed to declare more than £1.2m earned from their property portfolio and falsely claimed tax credits.

According to Get West London, the wife avoided jail with a two year prison sentence, suspended for two years, while husband Naveen was handed a three year and eight months prison sentence.

Both were found guilty after a trial at Isleworth Crown Court on 14 January.

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Financial secretary on Making Tax Digital

The Treasury Committee has publishing correspondence between Andrew Tyrie MP, chairman of the Treasury Committee, and David Gauke MP, financial secretary to the Treasury, on Making Tax Digital.

Commenting on the correspondence, Tyrie said: “For the vast majority of businesses and many individuals, Making Tax Digital may be a sensible direction of travel. But there are some – for example, those who do not currently use computers or for whom quarterly reporting would be a substantial burden - who understandably remain very concerned about these proposals.

“The government should consult widely before reaching any decisions on this. The requirement for all businesses to maintain a digital tax account needs to be tempered by provisions for those for whom this would be an unreasonable burden. Nor should an ambitious timetable be imposed at the expense of greater clarity for the millions of businesses these changes will affect,” he said.

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Presbyterian Mutual Society auditor fined £140,000

Moore Stephens, the firm which audited the Presbyterian Mutual Society (PMS), has been fined £140,000.

The PMS had to be bailed out by the government in 2010 after savers rushed to withdraw money.

According to the BBC the FRC found Moore Stephens failed to obtain an adequate understanding of the legal and regulatory environment in which the PMS operated.

David McClean, an audit partner at the firm, was also fined £20,000, after failing to adequately test PMS board and management assumptions that it was complying with its own rules and with legislation and regulation.


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03rd Mar 2016 12:07

What about ...?

So we finally see auditors punished for failing to test compliance. Perhaps now we will see similar action in respect of the likes of RBS and Tesco?

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03rd Mar 2016 17:19

Yes, test the compliance in charities as well

As many of us have said before, audits of eg charities seem to be carried through with the minimum of adverse comment on potential areas of dodgy systems/practices, and the big firms are often involved in such audits. It seems to me that such firms have been treated as above the law before now.

How an Audit Partner at Moore Stephens - which used to have very high standards when I shared clients with them before the recession - could have neglected their duty beats me. They obviously wanted more than anything to keep the client rather than tell the truth about them. This is not the Moore Stephens that I knew and admired and it is quite depressing.

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