Sin Bin: Dundee newsagents banned after cheating HMRC out of £1m in 17 year fraud

Mohammed Arshid and his wife Maqsoodan Arshid were both directors of Nethergate Newsagents Ltd where for years they under-declared and concealed liabilities in relation to PAYE, National Insurance Contributions, VAT and corporation tax.

The fraud included submitting false P35 end of year returns for 17 years; concealing sales in VAT returns for a period of 64 VAT quarters; submitting incorrect company tax returns over three consecutive financial years between 30 November 2005 and 30 November 2007; and in the following six years understating the company’s sales.

The business was placed into compulsory liquidation in July 2014, on the petition of HMRC with debts of £1,044,973 and following a five-year investigation during which HMRC.

The pair admitted that their fraud had allowed them and their family to achieve personal gain including home improvements, private education and topping-up of employee wages.

An investigation by the Insolvency Service found Arshid had breached his fiduciary duty as a director by submitting false information to HMRC resulting in lost revenue on PAYE Tax, NIC, VAT and corporation tax totalling £1,020,423.

His wife was disqualified for abrogating her duties as a director which allowed Arshid the freedom to commit the offence, which they both personally benefitted from.

Robert Clarke, group leader - insolvent investigations north, said: “These bans should serve as a warning to other directors tempted to help themselves first; you have a duty to your creditors and if you neglect this duty you could be investigated by the Insolvency Service and removed from the business environment.”