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Hillgrove trial: Final arguments and summary

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25th Mar 2014
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The trial of celebrity PR adviser Richard Hillgrove is nearing its conclusion at Bristol Crown Court, with the prosecution and defence (Hillgrove himself) presenting their final arguments and the judge's summary of evidence. Find out the final verdict here.

The trial judge, Mr Recorder R Linford, briefed the jury on legal matters and set out his own summary of the evidence on Tuesday afternoon. His directions to the jury and the final arguments of both prosecution and defence are published below.

Judge's directions of law to the jury

As he began his summing up the judge told the jury that they should consider the following points and directions of law:

1. Are you sure that in failing to make returns for VAT for the limited company Mr Hillgrove was being dishonest?

2. Are you sure that in his failure to make PAYE returns for the limited company was Mr Hillgrove dishonest?

Members of the jury were told they would have to consider dishonesty in relation the “ordinary standards” of an average person.

“You need to find that the defendant must have realised he was being dishonest - not that he was just a financial shambles, but that he was dishonest,” the judge said. It has been up to the prosecution to prove this on both counts.

The judge mentioned how Mr Hillgrove had represented himself.

“Mr Ticehurst is an experienced and effective member of the bar and has been assisted by legal counsel and HMRC investigators throughout the trial. I haven’t been able to fight his [Mr Hillgrove] corner, but I’m here to keep it balanced.”

On the defendant’s character he explained that a criminal trial is not a character competition. Hillgrove was a man of good character with no previous convictions, cautions or warnings against him.

“Because of this you can say that he’s less likely to be a consummate liar, but the weight of his character is for you to consider.”

The judge noted that Hillgrove had put before the jury the fact that his two previous companies had “hit the wall”.

Hillgrove wanted the jury to have the full picture, the judge said, to demonstrate how he was dealing with the tax debt of the LLP with a time to pay (TTP) arrangement; and as evidence of how Mr Hillgrove did not want a repeat of the winding up of Richard J Hillgrove Management Limited back in 2004.

The judge balanced this with the prosecution’s allegation that this was in line with his “cavalier attitude” and he didn’t learn from his previous experience, which shows he is dishonest.

“But do not leap to the conclusion that given his previous dealings with HMRC he was dishonest,” Linford said.

The judge then turned to the facts of the case, accurately summarising three weeks’ of evidence in just two hours.

The judge will go over further points of law on Wednesday morning and the jury will then consider its verdict.

Prosecution arguments – Joss Ticehurst QC

To prove to the jury on each count that Hillgrove intended to cheat the Revenue on VAT and PAYE, Mr Ticehurst reminded them of three key points:

  1. Hillgrove Public Relations Ltd owed money to HMRC for VAT and PAYE
  2. Hillgrove PR failed to pay
  3. In not paying he was being dishonest.

Money was coming into the limited company on which VAT was due. While Hillgrove challenged the amounts due in his evidence, Bishop Jones accountant Louise Dale said any difference in the amounts was negligible.

He was not paying on time when money was due, Ticehurst continued. Hillgrove was well aware of this, but didn’t tell HMRC what was owed - there were no VAT submissions at all and no PAYE payments made.

Instead, he argued, Hillgrove spent the money living a lifestyle like those who he was doing business with. His expenditure included hiring Mercedes cars, buying Louis Vuitton items, lunching at Claridges and spending £3,600 on a holiday in Madeira.

When his accountants told him VAT was due, he said: “Hold fire.”

Hillgrove was aware that he was “off radar” with HMRC, as the prosecutor alleged he said in an email, and he was creating his own time to pay agreement to deal with the limited company VAT returns.

Bishop Jones kept saying, “Pay this to HMRC” and saying he had taken too much money from the business, Ticehurst continued.

“Hillgrove didn’t respond to the HMRC assessment of what they thought he owed them. Knowing this, he spent it, and how he spent it shows his dishonesty.”

The prosecutor predicted that in his defence, “Mr Hillgrove will say that he was confused.”

But, he continued, “What is there to be confused about?"

He had set up a new company - his third entity by this time - and he didn’t pay his tax.

“The liabilities were racking up, [and he was] always spending more than he had… The directors were taking too much money.

While the defence highlighted confusion of the issue of business v personal expenses, “He didn’t know what it was, nor will you, he was just spending it,” Ticehurst said.

“Hillgrove ignored the advice he had paid for…”

As far as his claims to have entrapped by HMRC investigator Paul Harding working in collusion with Bishop Jones, “The accusations are nonsense,” Ticehurst said.

The QC raised other examples where he argued Hillgrove attemped to mislead the court, for example by forgetting about Mr May, the “phantom person” who prepared his accounts.

Similar doubts hung over his explanations for the the “hold fire” VAT return emails. “Was he forgetting or misleading?” the prosecutor asked the jury.

“He took money that could and should be paid to HMRC, but he spent it on his business and personal life.”

Defence arguments – Richard Hillgrove (on his own behalf)

At the beginning of his summing up on Monday afternoon, Hillgrove said Mr Ticehurst had simplified what was in his and others' eyes an "incredibly confusing" case.

He questioned why he was being tried at a criminal court for what he described as a failure to file on time, and why the 1.5m late taxpayers who received £100 fines for being late with their self assessment returns were not.

Hillgrove maintained that he would have paid his tax eventually, but thought the TTP deal arranged for him to pay his outstanding LLP debt by September 2011 was "onerous".

Hillgrove said that there were times when he should have curbed his spending and that "money management was never my strong point". However he maintained that he did not deliberately cheat the Revenue, telling the jury that "hand on heart, nothing could be further from the truth". 

"I should have tightened my belt but I thought, we have the Time to Pay, we’re fine, we will get there in the end," he said. 

He spoke about "unorthodox" receipts such as chocolates, champagne and flowers for clients, that Mr Ticehurst had queried as money he should have spent paying his tax bill.

But Hillgrove said if he hadn't done these "basic" things, he would not have been seen as professional in the PR industry and not retained or won any clients. 

The lack of any process at his accountants, Bishop Jones, differentiating his business and personal expenses led to confusion.

Rather than having a blasé, "Del Boy" attitude toward his tax liability responsibilities, Hillgrove maintained he had been actively responsible about his financial affairs, employing multiple accountants to help him. 

Hillgrove reaffirmed that he did not give any verbal or written permission to Louise Dale to incorporate Hillgrove Public Relations Ltd. 

"Why would an accountant, with the company on its knees in an onerous time to pay deal, go ahead and incorporate a limited company?" he asked, adding that it was a "no-no" in the accounting world to incorporate an entity without written permission to do so. 

Hillgrove told the jury he had paid £52,000 in tax, which he believed had been deleted from HMRC's computer systems.

He said HMRC investigator Paul Harding did not report this amount of tax paid when filling out his 5 x 5 x 5 intelligence report after finding the SAR entered by Michelle Bishop, because of a computer error. But Hillgrove then said he thought something "more untoward" than a computer error had occurred. 

He suggested Harding had been working with Bishop Jones "long before" April 2012, and referred to a period in May 2011 when Michelle Bishop had, he said, moved the tax liability data from the LLP to the limited company within Sage - but not "in reality" as HMRC had said it couldn't be done. 

He told the jury he believed Michelle Bishop was trying to 'set him up' in advising him to phoenix his company, something he says she "pushed" at him.

It would have been a "fantastic crime", he said, if he had phoenixed his company. But he added he "did not take the bait" and had refused to do so. Hillgrove mentioned that Bishop had written on the SAR that he had refused to go down that route due to his "links to 10 Downing Street". 

In addition, he had sought the advice of corporate lawyers and his then new accountant Vimal Shah, at PSJ Alexander in London, who, he said, told him Bishop's advice to enter into a pre-pack was dangerous. 

Hillgrove told the jury that he believed Bishop may have submitted a SOCA report out of "spite" when she was sacked as his accountant, and added that he believed it was not a normal thing for accountants to do.

He added that he thought it could potentially be officer Harding that submitted/encouraged Bishop to submit the report - and added that they may have collaborated to "scale up and move in for the kill" on him with the SOCA report.

He added that when switching accountants from Bishop Jones to PSJ Alexander in January 2012, Bishop had not given his Sage data to the new accountant straight away. She did so later, he said, but asserted that she did not provide him or Shah with the passwords to access the Sage data. He maintains that if he had received access to this, he would have filed his returns. 

During his summing up, Hillgrove spoke about personal and business difficulties he said he encountered as a result of the investigation. These problems included the ill health of his wife, being "brandished" in local press as a "tax fraudster" that resulted in his 10-year-old son being bullied at school and his company losing 85-90% of his clients, including Sting and James Caan, resulting in a drop in turnover. 

"I am now aware of the seriousness of paying my taxes on time," he said, adding that he thought delaying paying his tax was stupid rather than criminal.

To preserve the fairness of this report comments have been disabled.