Gainsborough

Jailed tax dodger faces selling his home to pay back £67k in assets

A businessman who dodged paying thousands of pounds VAT in a desperate attempt to save his company has had assets of £67,000 confiscated under a court order.

Richard Hotchin, who was jailed earlier this year after admitting using fake invoices to falsely reclaim VAT, now faces having to sell his home at Scotter to comply with the confiscation order.

Recorder Paul Mann QC, sitting at Lincoln Crown Court, ruled that Hotchin benefited from his crimes by £176,991.

The Recorder ruled that Hotchin has available assets of £67,127 and ordered that this amount should be confiscated under the Proceeds of Crime Act.

Hotchin was given three months to come up with the money or he faces a 12 months prison sentence.

Edna Leonard, representing Hotchin, said the money was tied up in a property which is to be sold so that the order can be complied with.

At a hearing in January Hotchin, 39, of Messingham Road, Scotter, who at the time was the sole director of Scunthorpe-based Qube Specialist Maintenance Solutions Ltd, admitted a charge of cheating the public revenue between April 30, 2012 and March 19, 2014.

He was jailed for 21 months.

The court was told at that hearing that Hotchin’s company faced cash flow issues arising from problems that arose over payments for a major contract.

Hotchin used fake invoices to falsely reclaim VAT as part of the tax fraud only to be caught out following a VAT inspection.

Ian Way, prosecuting, said “He created false accounts records, provided false documents and submitted false VAT returns. He did go to some lengths to evade his VAT liabilities.

“The motivation for evading VAT and submitting false invoices was cash flow.”

Mr Way said that Hotchin submitted false returns to HMRC for three different VAT quarters and paid the amounts due according to the forms.

The prosecutor added: “It is the prosecution case that these three VAT returns were fundamentally false in that they intentionally misrepresented the due amounts owed to HMRC relying on false invoices to reduce liability.”

Nick Johnson QC, in mitigation, said that Hotchin had always intended to repay the tax.

He told the court: “The reason behind this was to try to deal with an acute cash flow problem. This was a far from sophisticated attempt to evade liability. It was very easily uncovered. He always intended eventually to comply with his VAT liabilities.”

Mr Johnson said the company’s problems arose after it won a major contract which in hindsight was too big for the firm to deal with resulting in cash flow problems and ultimately leading to the liquidation of the company in December 2015.

“He suffers from Multiple Sclerosis and has done for nine years. None of the money has been repaid because he has not been able to. His own personal finances are in disarray. Since this he has not been able to work.”