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Fraud

We have a tenant in one of our commercial properties. His been there for 8 years. He has been running a Indian restaurant with a average turnover of £4-5k a week. We now find approximately every 14 months he opens a company and closes a company all of which claim to trade as the same on going business run in our tenanted property. Management and tenant has never changed. We now find that one of the management being a business partner to the tenant is a banned director, yet he has continued to run the financial affairs and management of the business. Non of the company’s or the trading business has submitted accounts, or completed a proper tax return or registered for vat.  We further believe that the accountants are assisting in various frauds as they have full knowledge of the company’s opening and closing , staff wages as well as things like civil penalties. The company’s are applying for voluntary strike off despite being up and running as income producing business for at least 14 month periods. The strike-offs invariably means creditors don’t get paid particularly as creditors are never notified of the company’s intentions. Has anyone got any advise and contribution to our concerns

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26th Mar 2019 21:40

I would suggest that this is really one for legal advisers.

But to get the ball rolling, who is the tenant under the lease? Does the lease allow anyone other than the tenant to conduct business from the premises? If not, or the tenant is otherwise in breach, I would, under legal advice, kick him out.

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26th Mar 2019 22:32

If they are paying the rent, keep your head down.

If you want to make an issue of it (and risk losing rent) and you have evidence to back up your assertions, contact HMRC :

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/c...

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26th Mar 2019 22:55

The up to date situation is that at 04;00hrs they stripped the property stole the boiler and moved round the corner set up a new business. Leaving 8 years on the lease , rent owing and damage to the property amounting to £30 k. Not to mention all the company (s) debt.

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By zarar
27th Mar 2019 01:00

Re the update - this just happened to occur on the day you posted this? All seems very suspect

But yes you need legal advice

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27th Mar 2019 06:46

No sorry this happened three weeks ago and the Police don’t want to know. There view is that it’s up to other individual organisations to investigate.
To my mind fraud is a criminal offence but it seems the Police now pick and choose the crimes they investigate now.

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to SUEBEN2003
27th Mar 2019 07:49

I’m sorry for your position but you really are on the wrong forum. You need to seek legal advice immediately.

But if it happened 3 weeks ago, why was this not mentioned in your question?

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to Wilson Philips
27th Mar 2019 09:12

Wrong forum, wrong medium.

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27th Mar 2019 09:20

I posted a synopsis of the situation in an attempt to get some informative discussion. I think the relevant facts are not being considered. The involvement of the accountants, section 1004 (1) (b), 1003 (6) (a) and 1004 (7) of the companies act.
Clearly the use of ltd companies is a method to avoid vat and income tax completely as well as other liabilities.

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to SUEBEN2003
27th Mar 2019 09:40

SUEBEN2003 wrote:

I posted a synopsis of the situation in an attempt to get some informative discussion.

Oh, so it's all just hypothetical.

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to Tax Dragon
27th Mar 2019 09:51

No it’s not hypothetical

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to SUEBEN2003
27th Mar 2019 09:56

So you know as fact that the Accountants are involved and complicit?

Contact Companies House with your proof re the Director who has been struck off.

Stand outside their new shop with a big placard demanding your boiler back.

Did you get personal guarantees for the rent?

Surely there was a bit of a hint of trouble when the first Ltd co went belly up when the rents started coming from a different company/name.

Its clearly an upsetting and frustrating time for you but this is not the place to vent and dictate the 'relevance' of facts being considered or not. You need paid for legal advice (as already mentioned)

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to Cheshire
27th Mar 2019 10:04

The rent came from the tenant at all times. Do you not see the implications and abuse of the system. The revenue denied to the country and desperately needed services. Do you support this behaviour, are you passive and just of the view look the other way. This is accounting and accountants creating fraud

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to SUEBEN2003
27th Mar 2019 10:13

SUEBEN2003 wrote:

The rent came from the tenant at all times. Do you not see the implications and abuse of the system. The revenue denied to the country and desperately needed services. Do you support this behaviour, are you passive and just of the view look the other way. This is accounting and accountants creating fraud

Of course I see the implications and abuse. No I do not support such behaviour, am not passive and I do not look the other way. Have indeed reported dodgy business doings in the past.

But now you appear to be tarring all Accountants with the same damned brush.

You have not provided ANY evidence of Accountancy wrongdoings. You are wasting time chatting on here when you should be dealing with the issue of sorting this out properly.

Waste of time and space

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to Cheshire
27th Mar 2019 10:30

No I am not taking all accountants. It’s my reference to the same accountants involved with all the companies in this situation, may be its you trying to drag my concerns of the tangible issues of the rails. That said do accountants report the acts of other firms ? I would add that this situation is only going to get worse as long as people look the other way.

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to SUEBEN2003
27th Mar 2019 10:35

SUEBEN2003 wrote:

may be its you trying to drag my concerns of the tangible issues of the rails.

You do like to spread unfounded accusations around, dont you. Im with JCreswell the apologoly is awaited.

You have come on here for advice, you have had advice, take it or leave it.

You have been asked some questions which remain unanswered.

If you have real proof that the Accountant is acting illegally then report that Accountant too.

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to Cheshire
27th Mar 2019 16:54

What unfounded accusations?
There are real tangible issues that clearly are mirrored across the uk
What questions are you saying are unanswered?
I have documentary evidence regarding the accountants, report them to who ? I think someone else asked that but that’s unanswered as well.

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to SUEBEN2003
27th Mar 2019 10:45

SUEBEN2003 wrote:

That said do accountants report the acts of other firms ?


Report to whom?
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to davidwinch
28th Mar 2019 10:46

Do you not have a watch dog or regulator

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to SUEBEN2003
28th Mar 2019 10:52

SUEBEN2003 wrote:

Do you not have a watch dog or regulator

We have two cats, if that helps.

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to SUEBEN2003
28th Mar 2019 11:17

It depends. If the accountant (or his / her firm) is a member of one of the professional bodies (such as the Institute of Chartered Accountants in England & Wales) then that body will act as a regulator, and you can make a complaint to it.
If the accountant is not a member of one of the professional bodies then there is no regulator to whom you can complain.
Anybody (who does not have relevant criminal convictions) can set up in business as an accountant. There is no requirement to have any skills, knowledge or qualifications before doing so.
David

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to SUEBEN2003
27th Mar 2019 17:57

SUEBEN2003 wrote:

The rent came from the tenant at all times.

So who is the lease made out to? Is it the first liquidated company, or is the tenant an individual who has traded under the various Ltd Co's over the years.

If the latter then take the tenant to small claims as an individual.

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to legerman
27th Mar 2019 18:09

The lease is made out to a individual tenant. He then brought a business partner in to run the business. Some direct links over the years have remained with the tenant such as the alcohol licence and the rent being paid. The manager come business partner has run the business cost through seven company’s over 7 years. Opening and getting the company’s struck off as he went. The income was collected each week and sent to the tenant who then redistributed the money. Never registered for vat or paid income tax stamp creditors etc. The ownership,management or business never changed.

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to SUEBEN2003
28th Mar 2019 12:30

Finally we're getting somewhere. Sue the tenant then, the individual, for unpaid rent and damages.

Crack on.

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to thevaliant
28th Mar 2019 13:45

took only 3 Qs!

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to SUEBEN2003
28th Mar 2019 12:32

SUEBEN2003 wrote:

The lease is made out to a individual tenant. He then brought a business partner in to run the business. Some direct links over the years have remained with the tenant such as the alcohol licence and the rent being paid. The manager come business partner has run the business cost through seven company’s over 7 years. Opening and getting the company’s struck off as he went. The income was collected each week and sent to the tenant who then redistributed the money. Never registered for vat or paid income tax stamp creditors etc. The ownership,management or business never changed.

Firstly, your direct involvement is only with the tenant. If he owes you money then it is for you to seek recourse. Bernard has suggested a letter before action followed by a statutory demand. For 30k that's a good suggestion, providing he has assets worth that much.

Secondarily, it isn't illegal to strike off a company and start another, although I entirely agree that this isn't policed sufficiently and HMRC could do a lot more in retrieving assets because if tax hasn't been paid it's highly likely there is an overdrawn DLA, which HMRC could pursue the individual.

As you've complained to HMRC, rest assured that they will have recorded it, and the individual(s) will be on their radar. Of course they won't keep you updated, they have no legal or moral obligation to do so? How they deal with it is down to them. You've done your duty, that is all you can do.

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to legerman
28th Mar 2019 12:52

Yes thank you.
The statutory demand is a good way forward.
Not saying it’s ilegal to close a company....
I am saying you can’t go for voluntary strike of or be struck off if you have been trading for more than 3 months.
Also the assets become bona vacata.
These people are opening and closing regularly just to avoid creditors. They are supposed to give notice of intention to creditors... but they don’t
Thank you for your input, much appreciated

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to SUEBEN2003
28th Mar 2019 13:01

SUEBEN2003 wrote:

I am saying you can’t go for voluntary strike of or be struck off if you have been trading for more than 3 months.

As you've already been told, that is not correct.
SUEBEN2003 wrote:

Also the assets become bona vacata.

"vacantia" - and only if the assets are still held by the company at the date of dissolution.
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to SUEBEN2003
28th Mar 2019 13:09

SUEBEN2003 wrote:

I am saying you can’t go for voluntary strike of or be struck off if you have been trading for more than 3 months.
Also the assets become bona vacata.

You need to read your own posts and decide whether they say what you want them to say.

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to SUEBEN2003
28th Mar 2019 13:50

What? You mean you havent actually started this process when they ripped you off 3 weeks ago! Do you actually have a solicitor yet?

Why not just concentrate on actually sorting your own issue out with this lot before taking on all the other issues on behalf of the rest of the western world. You can do the latter once you have got your cash back.

But whatever you do - get your facts right before you act because on so many of this thread you have got them completely wrong, as pointed out already.

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27th Mar 2019 09:24

I would also add that HM are non assistive as they won’t discuss or make any enquire to you as informant despite the fact that information as to evidence of fraud is beyond there reach. The system is flawed and as such is promoting productive escalating fraud

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to SUEBEN2003
27th Mar 2019 09:43

If you want to use this forum to let off steam, fair enough, but it's not going to get you anywhere.

If you want the system to change, speak to your MP, or contact Mel Stride.

If you have suffered financial loss, speak to your solicitor.

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to Wilson Philips
27th Mar 2019 09:53

Seriously, I am not wanting to let off steam. If you don’t have something constructive and intelligent to say can you please consider someone else’s matter.

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to SUEBEN2003
27th Mar 2019 10:06

What exactly is 'not constructive' about what WP has said?

Read it again, it has some good advice.

HMRC will take your report but of course they will not provide feedback to you. Just as they wouldnt feedback to me if I supplied them with a report on your business!!!!!!

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27th Mar 2019 09:48

Check out this list in the link below:

https://www.gov.uk/government/publications/publishing-details-of-deliber...

You will see these types of restaurants take the crown (as well as the biscuit of course) and is nothing unusual I'm sad to say. Why HMRC do not police these things more instead of hounding law abiding taxpayers for the loan charge (I read HMRC have over 500 staff just working on that alone) is a total mystery to me.

If you report it to HMRC per the link below I suspect it will just go to the bottom of a very big & dusty pile:

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/c...

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By DJKL
27th Mar 2019 09:51

Yes- get rid of them.

We had one similar a number of years ago. Catch with ours was they were also letting the utility companies hang out to dry which then got to the point that when we retook possession electric supplier wanted a deposit from us to allow us an account..

Check who the lease is with- in what name- I suspect they will either no longer be trading in that name or will have in occupation an entity other than the tenant.

If your leases are decent they will have some form of restriction re sub letting and you may even find the lease is in name of a company which no longer exists if they are really stupid which certainly in Scotland makes removal pretty simple- give us the keys and FO.

We got rid as we started to get concerned about reputational damage to ourselves as landlords, we did not wish to be viewed by wider creditors as complicit.

Good luck- it is these sorts of tenants that consume about 30% of your working life but constitute about 5% of the rent roll-after twenty years in property this September I have developed an aversion to high maintenance tenants so would just offload if you can and get on with life without the grief.

Edit-this is what comes from not reading the whole thread just the OP-as Harold Macmillan is quoted as saying, "Events, dear boy, events".

To the OP- forget retribution via the legal system, police etc, I very much doubt it will get you anywhere and you are burning more money (your time) after your losses- tenants trashing property happens.

If you are somewhere like Edinburgh, with a connected network of property surveyors, developers, investors, who all gossip, just trash their reputation in the wine bars etc of the city- everyone soon gets to know with whom they ought not do business.

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to Justin Bryant
27th Mar 2019 10:00

Thank you , sensible comment ! Yes on this site there is a article re Loraine Kelly.... she is just a drop in the ocean to what’s really going on. The difficulty is that the company’s act is not being policed. There are references to criminal offences but the Police will not support any investigation which then passes the matter back to the dusty heap at the revenue. Then you have accountants supporting this making more money... law is law ! It’s black and white but no one is enforcing it adequately

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to SUEBEN2003
27th Mar 2019 10:04

SUEBEN2003 wrote:

Thank you , sensible comment ! Yes on this site there is a article re Loraine Kelly.... she is just a drop in the ocean to what’s really going on. The difficulty is that the company’s act is not being policed. There are references to criminal offences but the Police will not support any investigation which then passes the matter back to the dusty heap at the revenue. Then you have accountants supporting this making more money... law is law ! It’s black and white but no one is enforcing it adequately

Eh, I think you mean 'some' accountants. I think you will find that it is the exception, rather than the rule, for accountants to help with shit[***][***] like this.

I await our apology.

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to JCresswellTax
27th Mar 2019 10:07

Yes I DO mean some accountants. Thank you

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By DJKL
to SUEBEN2003
27th Mar 2019 10:18

Such is life- you could spend a lifetime railing against these sorts of things but you might well find, on your deathbed, you have likely achieved virtually nothing to advance matters. There are crooks and dodgers in all walks of life, accept and just be forewarned for the future.

The number one lesson is keep in touch with tenants, you/your property managers ought to pop in to say hello, find out what is going on with them etc-information or clues in advance can prevent such things happening.

As an example our property manager tries to place work with tenants, or encourages cross work from tenant A to tenant B, (Do you know x, he/she can do that for you etc)- a closer link rather than just sign lease and see you at rent review really helps.

In addition it will not prevent but it will significantly reduce frequency of bad debts as well- if you know your tenants and they know you they will be more likely to come to you earlier if say business takes a downturn, over the years we have had a few we have placed in smaller or bigger units as their business size has changed, and even when you lose them to another landlord you may in ten years time get them back.

Imho **** happens, move on and try to reduce the chance it ever happens again with A N Other tenancy.

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to SUEBEN2003
28th Mar 2019 07:27

What precisely do you imagine that Lorraine Kelly did that was "wrong". She is not avoiding tax - she is a genuinely self-employed person (although the decision was only at First-tier it was comprensively analysed and full reasons given for the tribunal's decision). It is very easy to sling around accusations because you are not aware of the full situation (hence all the current bunk about the very rich ALL avoiding tax like crazy... yes, some do, most - our clients (using the royal "we" here) - pay the correct amount based on their individual circumstances). Tax evasion is criminal and it appears that your tenant has crossed that line, but please don't judge someone (who was just held by a tribunal to be correct in their assessment of their tax position) by the same yardstick.

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to slipknot08
28th Mar 2019 09:15

You should read what I am saying..... thousands have been wasted on the Loraine Kelly situation. She typical flavour of the month situation while the revenue refuses to deal with the true multiple offenders

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27th Mar 2019 10:07

Clearly you have reason to believe that criminal offences have been committed. However the police & other law enforcement agencies have limited resources. I understand over 200,000 complaints of fraud are made per year and there are about 15,000 prosecutions annually. This indicates that less than 10% of complaints result in prosecution. I am not surprised you have found no enthusiasm from the authorities to act on your report.
I suggest you focus on your own losses. Speak to a solicitor.
David

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to davidwinch
27th Mar 2019 10:22

David, the system clearly needs to change. It’s an increasing situation that is causing substantial loss to the system as well as feeding criminal behaviour. Those that are entrusted to pursue issues are clearly only pursuing the legally based individuals as they are trying to adhere to the system, and that said contributing to the system. But others are blatantly not over and over again. Another example the particular firm of accountants involved have assisted in Bangladesh people coming to this country following marriage to there uk partner based on false income declaration. Further the abuse of the companies act has allowed several of these companies to be closed once served with civil penalties for employing illegal immigrants. Not to mention all the innocent creditors loosing out each time. This is why the companies act needs to be enforced as the issues span way out and it’s costing us all thousands.

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to SUEBEN2003
27th Mar 2019 10:36

These are points you could raise with your MP or Police and Crime Commissioner.
David

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to davidwinch
27th Mar 2019 10:40

Apparently that is neither constructive nor intelligent advice, David!

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27th Mar 2019 10:14

SUEBEN2003 wrote:

We have a tenant in one of our commercial properties. His been there for 8 years. He has been running a Indian restaurant with a average turnover of £4-5k a week. We now find approximately every 14 months he opens a company and closes a company all of which claim to trade as the same on going business run in our tenanted property. Management and tenant has never changed. We now find that one of the management being a business partner to the tenant is a banned director, yet he has continued to run the financial affairs and management of the business. Non of the company’s or the trading business has submitted accounts, or completed a proper tax return or registered for vat.  We further believe that the accountants are assisting in various frauds as they have full knowledge of the company’s opening and closing , staff wages as well as things like civil penalties. The company’s are applying for voluntary strike off despite being up and running as income producing business for at least 14 month periods. The strike-offs invariably means creditors don’t get paid particularly as creditors are never notified of the company’s intentions. Has anyone got any advise and contribution to our concerns

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By DJKL
to Cheshire
27th Mar 2019 10:22

Insurance?

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to DJKL
27th Mar 2019 10:25

?

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to DJKL
27th Mar 2019 10:27

Absolutely

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27th Mar 2019 10:33

Does anyone realise that a company can’t be struck -off if it’s been trading for 3 months or more

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