A Freelance IT Consultant Jailed For Tax Fraud: Oh human folly!

“I can resist anything except temptation.” 
—Oscar Wilde, from Lady Windermere’s Fan

As an experienced accountant, tax advisor and managing partner of DNS heading the team, my own and the team’s primary concern is 1) compliancy, 2) saving our clients all the money we can in taxes, in that order.

No one likes paying money in taxes to fund the treasury, but society is not sustainable unless we all pay our fare share of tax; there is no way to beat the system, but there are plenty of ways to work within the system to lower your tax bill, and make good use of all the benefits and allowances available.

The fraudster

Mr Hamauon Khan (HK) was a divorcee, a father, and a freelance IT consultant, who for reasons best known only to him decided to lie about his self-employment income to avoid paying tax and escape paying child maintenance. When caught, he owed more than £170,000 in taxes for income he had not declared. He was jailed for his crime at Lewes Crown Court for four years; that is, two years for the tax fraud and another two years for the child support offences.

Is HK a criminal or just an idiot?  Personally, I think HK is an idiot, who lacked good judgement and good sense, as well as a morally repugnant criminal who turned his back on an adult’s responsibilities to society and to his family. Did HK really believe that he could hide, disguise his income, and escape the law? Has he never come across the significant media publicity concerning HMRC’s new powers to investigate and bring to justice tax dodgers? Does he not realise that greed blinds people from the sense of foresight. Nothing to Declare is not a tax-planning option for the wise—it is the option idiots choose.

Hamauon Khan was known under several aliases including Billy Khan and Billy Love, yet the HMRC investigation was able to prove he had failed to declare his earnings. We have posted blog after blog of the ever-increasing use by HMRC of new technologies that help highly trained experts employed by the Revenue to identify and then bring tax dodgers to justice. This includes powers to inspect everything: books and accounts and bank accounts, all assets; and HMRC’s tactics include benchmarking as well as straightforward investigatory powers, such as undercover investigators that sit for many hours in wait, watching behaviour, and charting comings and goings, at the faintest whiff of possible tax fraud.

Benchmarking is among one of the most useful tools in HMRC’s arsenal of tax avoidance strategies, which it employs from the get-go in order to work out an estimate of what is probably earned by a suspect of tax evasion. An IT Consultant, it is common knowledge, does not work for anything less than around £30 p.h.

The Child Support Agency was part of the investigation. It found that HK had failed to pay child maintenance payments, which in my view, morally, is a crime in itself. He was jailed for two years on this count alone.

Spend, spend, spend 

It is easy to see how pleading poverty while living a lie could come to notice of neighbours and investigators: HK spent the money he should have given to pay tax, NI, and child support, to fund a lifestyle that included purchasing two properties, which included his own home.

Then think of his family … For failing to pay tax, NI, and child support, in sentencing Khan, the Judge said, “For a period of nine years through sheer greed you failed to pay tax . . . . Cheating the Revenue is a very serious offence. There has been sheer greed for a substantial period and you have used the money for your own benefit for a lavish lifestyle and foreign holidays.” HK’s properties will be sold to pay back his debt to HMRC. Not only will HK lose everything material, he will lose much more besides. News of the sentencing will have been published in the local newspaper. Thus, Mr Khan has put the name of his family and his children into disrepute.

To conclude That HK has lost everything is down to his greed: temptation is the most ruinous of all human failings! We at DNS want our clients to be safe from investigations; therefore, we encourage legal minimisation of taxes and total compliancy. Substantial savings in taxes can be won by working within the system, as all DNS clients well know. I would urge anyone with any concerns about their tax affairs to contact DNS immediately: any issues will be discussed without passing judgement and in full confidence.

About the author

Sumit Agarwal
Sumit Agarwal (ACMA ACA India), the Managing partner of dns accountants is a highly respected accountant with expertise in helping owner-managed businesses.