Chinese restaurant VAT fraudster back behind bars

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The owner of two Chinese restaurants, who has already served a jail sentence for VAT fraud, is back behind bars after failing to repay the money he stole from the taxman.

David Ying Chung Lai, who owns two restaurants in Newcastle city centre was initially jailed for 20 months for tax fraud.

Taxation investigators from HM Revenue and Customs (HMRC) discovered that he had been forging invoices in order to fraudulently reclaim VAT.

During a routine visit, a sharp-eyed HMRC compliance officer spotted spelling mistakes on invoices that looked unprofessional. A £45,000 invoice misspelt the company’s address, while a forged letterhead had ‘Limtied’ instead of ‘Limited’.

Lai had been ordered to repay more than £65,000 resulting from the tax fraud but, having failed to do so, he has been sent back to prison for a further 20 months – with the money still owed.

Diccon Wood, HMRC’s Fraud Investigation Service Assistant Director, said: “It is important that criminals like Lai don’t benefit from their crimes. That is why HMRC will always look to reclaim their criminal profits.

“Lai stole money and failed to repay it when he was told to do so. Now he is paying the price by having to spend another 20 months in jail.

“But it doesn’t end there; this isn’t pay up or go to prison instead. Lai still owes the money and until he pays it the amount will increase as daily interest is added.”

Lai’s debt remains and increases by £14.24 a day until paid. The amount currently stands at more than £68,000.

Dr Anjulika Salhan, a director and tax investigation specialist with Salhan Accountants commented: “This case illustrates the far-reaching powers at HMRC’s disposal.

“Where a person has deliberately set out to commit tax fraud, HMRC will not hesitate to prosecute and pursue the individual for the tax owed.”

“Only a minority of individuals intentionally set out to defraud HMRC. However, there are many people who find that they are under the spotlight of a tax investigation, having unwittingly broken HMRC’s tax rules.

“At Salhan Accountants, we work extremely hard for clients subjected to a taxation investigation. We not only clarify the issues and the process, but come up with solutions too.

Our experience, professional reputation, forensic attention to detail and negotiating skills mean we are well-placed to achieve positive outcomes.”

For more information about our taxation investigation services, please contact us.