Businessman who falsified VAT claim ordered to sell home or face imprisonment


A Lincolnshire businessman who created fake invoices to falsely reclaim VAT, now faces having to sell his home to comply with the confiscation order.

The court heard that Hotchin’s company, Scunthorpe-based Qube Specialist Maintenance Solutions Ltd, faced cash flow issues arising from problems that arose over payments for a major contract.

Hotchin attempted to ease cash flow by creating fake invoices to falsely reclaim VAT but was 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.

Recorder Paul Mann QC, sitting at Lincoln Crown Court, ruled that Hotchin benefited from his crimes by £176,991 and with available assets of £67,127 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.