Four face £5m tax gateway scam allegations

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Four men have gone on trial charged with making more than £4.5m from a fake tax return website.

Between June 2013 and June 2014, the four are alleged to have fraudulently directed users to their tax return gateway site, charging them up to £1,000 for filing tax returns.

Prosecutor Jonathan Sandiford told the jury at Teesside Crown Court that users were duped into believing they were dealing directly with HMRC, with the majority believing some or all of their money would be credited against their tax bill.

However, the defendants argued that the site carried a disclaimer stating it was not official, and was simply a ‘check and submit’ service.

‘Calculated to mislead’

Operating from offices in Sunderland, the four men are alleged to have set up fileonline.org.uk in green and grey colours to resemble the official HMRC site.

The site turned over £5.47m in five months, and according to prosecutor Sandiford after deductions of fees and refunds, the defendants received net payments of £4.672m from their card merchant service provider.

Speaking to the jury Sandiford said the central issue is “whether, as the prosecution say, this website was a scam, or whether, as the defendants will say, it was a genuine check and submit service to those who wanted it”.

Referring the jury to a copy of the website's homepage, Sandiford pointed out that the term 'submit your tax return online now' is used, “which we say would lead a user to think they were dealing directly with HMRC”.

Sandiford also argued that the use of the word 'gateway' was calculated to mislead, with one of the defendants remarking in an email that it was “rather official sounding”.

“We say the use of the domain '.org.uk' was designed to give the false impression the website was official,” added Sandiford.

When one of the defendants was interviewed, he claimed that the design was chosen to “look official”, using green and blue colours and avoiding red, black and yellow.

Due to the nature of the case, each member of the jury has been equipped with specially programmed iPads to help them get to grips with the hundreds of documents and internet screen grabs in the case.

Homepage disclaimers

The defendants argue that the website was always an unofficial ‘check and submit’ service, and carried a disclaimer stating this.

However, Sandiford told the jury that the disclaimers were inserted to “comply with compliance regulations imposed by internet search engines”.

“The disclaimers were not prominent, being either in a small font or a lighter one, making them harder to read,” continued Sandiford, who went on to claim that the homepage disclaimers were also bypassed by advertising links which sent users straight to a submissions page.

“Those that did complain were fobbed off by being referred to the disclaimer on the home page,” concluded Sandiford.

Jamie Wyatt, Michael Hughes, Stephen Oliver and Richard Hough each deny conspiracy to defraud.

The trial is ongoing and expected to take 10 weeks. Comments on this article are closed.

About Tom Herbert

Tom is acting editor at AccountingWEB, responsible for all editorial content on the site. If you have any comments or suggestions for us get in touch.