Vantis tax director guilty of £70m fraud

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David Perrin, a professional tax adviser at Vantis, has been convicted of defrauding taxpayers of £70m, HMRC has confirmed.

Perrin, who worked for the Inland Revenue in the late 80s and early 90s, was found guilty at Blackfriars Crown Court for “cheating the revenue by dishonestly submitting and dishonestly facilitating and inducing others to submit claims for tax relief which falsely stated values of shares which were gifted to charities”.

Confiscation proceedings are under way and he will be sentenced on 9 February.

Between 2005 and 2006 Perrin had devised and operated a tax avoidance scheme which he sold to wealthy taxpayers in order to exploit the law on giving shares to charity, allowing him to pocket more than £2m in fees.

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17th Jan 2012 14:16

What about the others?

If I remember rightly, Roy Faichney and one other person was on trial at the same time. What happened to them?

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17th Jan 2012 15:03

4 others I beleive

Roy Faichney is still awaiting verdict.  The 2 wives and other accountants were found not guilty

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18th Jan 2012 10:58

Premature

So if he is subsequently found guilty, couldn't the issue of this vitriolic Press release be considered prejudicial?

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18th Jan 2012 10:55

Which professional body did he belong to ?

The Christmas rhyme was very unethical !

Well done HMRC

Will the profession now start to distance itself from this sort of behaviour ?

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18th Jan 2012 11:23

Professional body?

As far as I can make out, he didn't have any professional qualification or affiliation. He was however Inland Revenue trained, and a former employee of theirs. 

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18th Jan 2012 14:55

QBE

 

 

what a great qualification to rely on...................

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18th Jan 2012 11:27

Professional body?

 

What is the point being made here please?

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18th Jan 2012 11:59

reply to Eric/Black Knight

Eric Robinson wrote:

 

What is the point being made here please?

 

The Black Knight asked; I answered...

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By dstickl
18th Jan 2012 11:48

Whistle blowing - or lack of it - by "Professional" body, ...

Whistle blowing - or lack of it - by "Professional" body, perhaps?

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18th Jan 2012 12:04

reply to Eric/Black Knight

 

 

I was referring to the second sentence specifically - no matter

 

Thanks

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Apologies are due for our bulletin's "Tax avoidance" heading

Some members have been in touch to castigate us for dispatching a bulletin this morning which put this article under the heading "Tax avoidance".

Yes, we do know the difference on AccountingWEB, but the letters were so big that they just seemed to disappear - did any of you spot the not-so-deliberate error?

We apologise to any and all who were offended by the misleading heading, which should of course have said "Tax fraud".

Thanks to Sillycountry and Alan Ferris, too, for highlighting the delicate situation concerning Perrin's co-defendant Roy Faichney. Please note that should he be stand trial again any prejudicial comments here could be interpreted as contempt of court. And as an aside, can members remember to keep the tone of their comments professional and respectful - even when they disagree with each other.

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19th Jan 2012 12:35

Lets get back to the point

John

Getting away from the "my professional standard of ethics is better than yours" mudslinging to which these comments have now descended, you use the expression "should he stand trial again". Can we then conclude that he was found not guilty of the charge, or that the jury was unable to reach a verdict, rather than that the jury is still deliberating as suggested earlier in this thread? Whilst I haven't been following the case, it would seem if that is true to allow two further possibilities -

- that Perrin engaged in the type of egregious behaviour described in the Press Release while Faichney did not, and if so the arrangements themselves may not have been illegal (though they are certainly distasteful).

- the HMRC Press Release is misleading as it trumpets its success against one defendant whilst ignoring the other.

The former possibility may help us all understand the difference between avoidance and evasion and be a worthwhile subject for debate. The latter will probably be met, sadly, with a shrug of the shoulders.

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18th Jan 2012 12:28

professional

the article uses the word professional...which would imply that he belonged to a professional body.......not that he just used to work for the Tax office.

Members of professional bodies have ethical considerations which even affect the way these services can be charged..where as non professionals have no rules or standards to adhere to or live up to.

Added to which, to describe the perpetrator as a professional unfairly taints the profession and professional Accountants and tax advisers.

And I thought Vantis were a firm of bona fide accountants...why was this rogue agent given free reins ?

 

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18th Jan 2012 15:01

"Vantis were a firm..."

 

 

 

Exactly, the commentator speaks truly - they WERE a firm of professhunul accountants.

But really will there be any significant impact on the firm?

Accountancy has a page of floggings/hangings each month of tinpot firms fined £loads for "bringing the profession into disrepute".

This time ICAEW won't need a long drawn out hearing, just a quick hour to hear pleas for mercy, and then a £1m fine, plus banned from peddling tax schemes for a year   .......or maybe not.

 

 

 

PS. wonder if the office he worked in was in Essex !

 

 

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18th Jan 2012 12:58

Clients...

Questions must remain about what clients thought was happening.  What were they told? “Buy these shares and then when they go up in value donate them to charity”?  Unless the client knew what was happening wouldn’t he want to just hold on to his newly acquired and ‘valuable’ shares?

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19th Jan 2012 15:30

i guess....

 

 

the clients were just told "sign here, give us a massive amount of dough, we do all the investing, give it back in a year's time with a huge pile of tax relief screwed to the back, our fees are a mere 10% of tax evaded"

so your point is unrealistic!

 

 

 

 

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18th Jan 2012 13:10

Civil recovery and penalties

presumably HMRC will invite those clients to amend their returns ? or the current accountants are writing a letter as we speak ?

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By cwatkin
18th Jan 2012 13:44

Etical standards -response to Black Knight

Members of professional bodies have ethical considerations which even affect the way these services can be charged..where as non professionals have no rules or standards to adhere to or live up to- SAYS BLACK KNIGHT. 

 

Black Knight you are talking arrogant nonsense. I do not belong to a professional body but do a lot of work for city lawyers and accountants as well as other clients. I abide by the same professional and ethical rules and standards.

There are rotten apples in every barrel be they members of professional bodies or not. You do not have to look very far to find examples of chartered accountants or solicitors convicted of fraud.

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18th Jan 2012 14:05

@cwatkin

that's good to hear

Whose rule book do you usually follow then ?

It is not arrogant nonsense !

I do agree there are bad apples in every barrel, but when you remove all the rules and safeguards the problem gets worse and those that are trained in ethical behaviour are presumably more likely to be aware of the issues.

Unfortunately this has largely gone out of the window in recent times causing problems in all sectors.

At least the clients who received advice should be covered by PI insurance.

If you were to take no notice of professional ethics then nothing would happen to you where as I would be fined and hung out to dry.

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18th Jan 2012 14:37

Hung out to dry?

I spent 12 years in the Inland Revenue and subsequently spent 13 years in the profession, I am now a sole trader.  My "professional qualification" is Revenue full training which I am happy is as good as any other, ethically aswell as technically.  No matter how you train people, in every walk of life a minority will lapse from acceptable standards, irrespective of whatever enforcement regime is in place.   This chap has fallen foul of the criminal law which applies to anyone no matter how they badge themselves. He will no doubt get the sentence coming to him with a hefty further sentence if he fails to pay any confiscation order made against him.  The fact he is ex Revenue may also be taken into account in the sentencing.  This is much more serious than treatment meted out by professional bodies. In my experience many professional bodies will not take proceedings against "ethically trained" members in situations where they have assisted in civil tax fraud, unless HMRC do it first on a criminal basis.  HMRC have been a substantial failure in prosecuting criminal tax planners over the last 10 years or more and it is good to see them flexing their muscles and getting it right.  Even where professional bodies do take action it takes many years and being drummed out of a professional institute does not prevent them from continuing to trade.

Just remember all that cash lost by banks in the last 4 years, all cheerfully signed off by professional auditors for a big wad, I just do not not believe there was no fraud involved and who is even asking any questions of the ex head of RBS and the relevant auditors.  Maybe the IoB and ICA are carrying out a meticulous professional investigation, I look forward to reading the results.  It would also be good to hear from you professionals about what your institutes are doing to make sure there is no repeat of 2008 in the coming 12 months.  I forgot, there already has been MF Global.

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18th Jan 2012 15:11

Tax Avoidance

 

 

 

the trouble is that we all want to pay low tax whilst having gold plated hospitals/massive missiles/ wind farms/ organic everything.

the fair taxes campaign vs. Vodaphone, Boots, Barclays, HSBC etc. to some extent is high-lighting the whole area of whether there is a moral low water beyond which tax schemes should not go.

At the moment we say it's "acting on the clients instructions blah waffle".

We all know that no client is capable of dreaming / understanding this muck themselves, we flog the tax scheme idea to them and they enthusiastically sign up.

 

 

 

 

 

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18th Jan 2012 15:15

member of a professional body or not...

it is the individual who decides how ethical he/she is.....nothing to do with a set of rules....they merely set out what the individual should do in various circumstances within that body.....

 

We are not talking about mistakenly placing £100 into the business account rather than a client account....this guy committed fraud on a vary large scale....I have a feeling even if he had been a member of chartered institute that he would not have been flicking through the pages of his ethics book to check whether what he was doing was right or wrong...he was someone who was going to commit the crime whatever the situation.

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18th Jan 2012 15:19

Vantis - the firm

In case anyone reading this does not already know, Vantis is no longer trading having gone into administration in June 2010.  The various offices and advice units were sold off by the administrators and so the firm has disappeared from sight.

David

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18th Jan 2012 15:28

the line

I think.... is where the scheme relies on some disinformation or something fictitious that only exists in the paperwork, or perhaps not telling HMRC all the relevant facts.

for example a loan repayable on demand.....that never comes home..?

Substance over form I say....but this never seems to be applied in these schemes.

schemes that abuse the rules to set out to assist the needy are repugnant (to My mind)

However the tax planning (probably not regarded as planning anymore by the efurb lot) we do often leaves money and more importantly cash flow for business growth and survival.

 

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18th Jan 2012 17:17

Confused

What difference does it really make whether you are a member of XYZee or not?  Surely your own personal integrity should be in operation at all times - or am I being naive? 

TheAncientOne

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18th Jan 2012 22:05

Vantis etc

I have no sympathy for him, his colleagues or, more importantly, his wealthy clients who got £68m of the £70m defrauded. The clients should be in the dock too. As long as it is only the accountant who gets the public flogging (deservedly) the greedy and unprincipled clients pushing for such advantages will push greedy and unscrupulous professionals into providing them.

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19th Jan 2012 10:00

handcuffs ? just out of interest

Are they still using those old things in the photo ?....

Would you actually be handcuffed for a financial crime ?

 

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19th Jan 2012 11:25

@ Black Knight

Not that style of handcuffs.

As for handcuffing a person it all depends on the risk assessed by the officer present.  If he feels he or anybody else may be a risk from the person then he can handcuff them, does not even have had to arrest them.

 

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19th Jan 2012 13:36

presumption of avoidance

Judging by their xmas song, at one point they thought it was "avoidance" (and possibly did right up until the "guilty" moment)

 

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19th Jan 2012 16:15

Putting clients in the dock

An experienced non  tax colleague showed me the marketing material and counsels opinion for this scheme in 2005, I advised him not to touch it with a barge pole as to me it was quite clearly artifical and manipulative.  He decided to do it and then moaned when he got hit with a fee and didn't get his tax repayment. 

At a professional dinner a couple of years ago I sat next to a commercial QC who had done this scheme and couldn't understand what the problem was.  It had a counsels opinion saying it was ok so it must be fine. 

The counsels opinion I saw was about two lines which said in effect "this is ok".  It was the shortest tax opinion I'd ever seen which was enough to make anyone smell a rat if they were used to seeing such opinions.

If professionals cannot apply the sniff test correctly, what hope is there for the general public when professionals tell them a scheme is ok?   These punters probably have no criminal intent so they should not be in the dock.  The only way to stop this type of abuse is to have very clear lines and to either legislate the loopholes out of existence, or scare off the people who peddle the schemes by sending them to jail and taking all their money off them.   In short the Revenue and Government have let this situation develop and they need to sort it out.  Its no use expecting the professional bodies to assist, they are too busy making money.

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