Pure Tax Investigations

09/06/2026

📢 HMRC arrests east London pair in TikTok/social media related tax repayments fraud projet. Thanks to Croner-i and Sara White for the write-up: https://lnkd.in/eXvTjiEW

🔊 Two men have been arrested in East London after blocked £153m in alleged fraudulent tax repayment claims; scam promoted on TikTok. The suspects allegedly used TikTok to persuade people to wrongly secure tax refunds and hand over their tax account details.

🔉 HMRC's cybercrime investigators arrested the pair during a raid last month, and subsequently released on bail. They were arrested on suspicion of fraud by 'false representation' contrary to Section 2 of the Fraud Act 2006.

No further details are known about this ongoing investigation currently, but HMRC is urging people to be cautious about any online posts claiming ‘risk free’ rewards, and is flagging the prevalence of these types of scams, saying it has ‘seen similar suspected scams across multiple social media platforms - such as Instagram and Snapchat’.

🔔 We're conscious there has been widespread mis-selling and 'too good to be true advice' from "finfluencers" online already, and we have written about this already. Take a step back and consider these supposed social media tax experts' credibility first. It follows that anyone giving out their private/tax details risks their identity being stolen and their bank account being frozen etc.

Pure Tax Investigations

04/06/2026

📢 Tax Case Judgement: builder loses CIS tax appeal at the FTT, unsurprisingly. Thanks to Croner-i and Rickie L. for the write-up.

🔔 The taxpayer opted not to tell their accountant about cash payments they made to their sub-contractors, and was unable to convince the FTT that it had taken 'reasonable care' with its tax affairs for CIS Regulation 9 purposes, making it liable for the uncollected tax amounts.

George Jarda was engaged to supervise sub-contractors for another company and, when that company ceased around 2015, he stepped into the vacuum and formed George Star Builders Ltd (GSB) as the sole director/shareholder. GSB took over most of the staff and contracts of the ceased company and appointed an accountant and bookkeeper to deal with its affairs. GSB registered for CIS as a contractor and obtained gross payment status.

Bearer cheques
In a curious move, sometime in 2017, Jarda began asking customers to pass him cheques with the payee sections left blank. The cheques went on to be cashed at a bureau and some of the money was used to pay GSB's sub-contractors. Jarda said he believed this was all above board, as the sub-contractors would then be responsible for their own tax affairs. GSB subsequently made £nil monthly returns, claiming that no payments had been made to sub-contractors...

📢 opened a Code of Practice 9 tax investigation (https://lnkd.in/ePepaAZ2) as it suspected GSB had deliberately underpaid CIS tax in those £nil periods.

Later, after an Independent Review found for HMRC, GSB appealed to the FTT.

The only matter which needed to be resolved was whether CIS Reg 9(3)(a) was met, specifically whether GSB had taken reasonable care to comply with s.61 FA2004.

🔊 The FTT found that a taxpayer taking reasonable care to meet its tax obligations would not have utilised a cheque cashing service to pay suppliers off-the-books and kept this from their advisers. No surprise!

🔊 Having become aware that there could be tax implications, a reasonable taxpayer would then look to take steps to investigate further. But Jarda seemingly chose not to do so, despite GSB having advisers who could have been consulted.

Pure Tax Investigations

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29/05/2026

Great night at India Week's gala dinner tonight.

22/05/2026

"You’ve had plenty of time to get on with it", MPs tell . Thanks to Croner-i and Jacob Grattage for the write-up.

📢 I sympathise with the MPs here and the general public. About time HMRC's top brass were grilled (again) over why they want more powers when they are not even using current rules, and have ‘only once taken action to prevent the facilitation of tax evasion’.

The influential Public Accounts Committee (PAC) focused on business tax compliance. They wanted to know why HMRC rarely used its existing powers in the courts and why it wanted more powers to crack down on big businesses when it was not using what it already had, for example under the Criminal Finances Act 2017 and the ineffective ‘special measures’ notices for large business tax compliance.

🔊 Focusing on tax evasion, Lloyd Hatton MP said: ‘HMRC in recent years has been given a number of additional powers… Yet HMRC has only once taken action to prevent the facilitation of tax evasion. ‘That was not against a large business, they have never done it against a large business.
.. ‘HMRC have never enforced a penalty against an enabler of offshore tax evasion despite having those powers for some nine years.’

Sarah Green MP wanted to know why ‘for 10 years you’ve had the power to sanction poor behaviour by the worst offenders, why have you never used those powers?’

🔊 Hatton asked: ‘What I’m finding difficult is whether these deterrents are robust, and if they are ever being implemented? Or is it the case very wealthy individuals, and large businesses, are being let off the hook by HMRC?’

HMRC's responses included the usual: we’ve developed counter fraud capabilities within large business, and we’ve got 43 ongoing investigations at the moment re Corporate Criminal Offence...

Hatton was not satisfied, again saying: ‘Can you understand the public frustration that it has never once been introduced against a large business… You’ve had plenty of time to get on with it.’

The hearing then switched to HMRC civil investigations, with MPs asking ‘how many investigations have you completed into large businesses’. But HMRC said they could not provide precise figures.

🔔 In case it isn't clear, I'm not a fan of pure strategy/policy staff creating new policies for the sake of doing just that. From experience, consultation with operational staff and real work examples was largely a tick-box exercise in practice. No wonder so many staff at HMRC dont' know about and/or how to use newer penalty regimes!

Pure Tax Investigations

02/05/2026

Tax case outcome: HMRC undone by own inefficiencies in new "discovery" rules case. Thanks to Rickie L. and AccountingWEB.co.uk for the write-up: https://lnkd.in/eyynrDdM

The FTT found that was unable to make a discovery assessment due to the taxpayer having provided sufficient information at the outset to allow HMRC to raise the assessment sooner and within the statutory enquiry window.

One of two parties to a freehold property transaction wrote to HMRC on 31 January 2012 to declare a 'call option' arrangement, in line with the anti-avoidance rule set out in FA 03 s.75A, flagging up the reduced SDLT figure declared. The letter was sent via their mutual employer’s postal system, and (wisely) scanned a copy.

"HMRC issued a discovery assessment for £32,480 in July 2014, almost two years after the enquiry window had closed in September 2012. After some back-and-forth, Madsen sent HMRC a full response in September 2015, enclosing a copy of the January 2012 letter.

"HMRC responded a staggering 9 years later in November 2024, stating that it had no record of the January 2012 disclosure letter having previously been received.

"Discovery rules
HMRC’s assessment had been made under FA 03 Sch 10 Para 28, which allows discovery assessments to be made outside the default timeframes. However, this is subject to Para 30, which restricts such discoveries to limited cases.

"Disorganised approach
This case highlights HMRC’s (albeit historic) inefficiencies, whether by the apparent loss of post received or by the huge amount of time it took for it to respond to Madsen, during which time he presumably believed the matter had been concluded.

"The FTT identified numerous points where the letter could have gone astray, both before and after it was in the hands of the Royal Mail, but went on to conclude that from “experience” misfiling by HMRC was most likely reason for the absence of the letter in HMRC’s records."

27/04/2026

Have you or your client received that dreaded brown-enveloped letter from , about a tax investigation, business enquiry or tax disclosure?

Are you or they looking for someone with considerable (over two decades) tax disputes and risk management experience, having worked at HMRC for over a decade, to help?

Do you or they want assistance with setting the strategy, providing clarity at each stage, expediting a conclusion and ensuring the outcome is commercial?

Then contact me at [email protected]

23/04/2026

🔔 A company director used smart glasses during a court hearing to phone ‘Abra Kadabra’ for help! Read more https://lnkd.in/egiwcMGN

In the High Court case of UAB Business Enterprise, Laimonas Jakstys v Oneta Limited & Ors [2026] EWHC 543 (Ch) the Judge called out company director for using smart glasses to call his lawyer named ‘Abra Kadabra’, and dismissed the case.

When being cross examined in court the Judge said ‘he seemed to pause quite a bit before replying to the questions’. Suspicions were raised further when Oneta’s counsel informed the Judge that she could hear ‘an interference coming from around Mr Jakstys’. Also, an interpreter, sitting in the witness box alongside Jakstys, confirmed she could also ‘hear interference’.

‘After a few further questions… Mr Jakstys’ mobile phone started broadcasting out loud with the voice of someone talking.

‘There was clearly someone on the mobile phone talking to Mr Jakstys. He then removed his mobile phone from his inner jacket pocket. At my direction, the smart glasses and his mobile were placed into the hands of his solicitor.’

Jakstys first denied he was using the smart glasses to receive coaching/answers in court, but a photograph of his phone’s call log revealed that various calls were made to someone called ‘Abra Kadabra’. Jaktsys first said it was a taxi driver, but ‘finally admitted Dr Miliauskis as well as his current solicitor assisted him’.

‘Not only have I held that Mr Jakstys was untruthful in denying his use of the smart glasses and his calls to Abra Kadabra, but the effect of this is that his evidence is unreliable and untruthful.’

Dismissing the case, Judge Agnello stated: ‘I reject Mr Jakstys evidence in its entirety…He had a blatant disregard for the signing of the disclosure certificate and carrying out his disclosure obligations. ‘I do not consider that what is set out in his witness statements is actually his evidence in accordance with the statement of truth he signed.’

Pure-Tax.com

23/04/2026

🔔 Seems I missed this one. A company director used smart glasses during a court hearing to phone ‘Abra Kadabra’ for help! Thanks to Croner and Jacob Grattage for: https://lnkd.in/egiwcMGN

In the High Court case of UAB Business Enterprise, Laimonas Jakstys v Oneta Limited & Ors [2026] EWHC 543 (Ch) the Judge called out company director for using smart glasses to call his lawyer named ‘Abra Kadabra’, and dismissed the case.

The incident occurred during a case brought by company director Laimonas Jakstys in a dispute about his position as a director of a property development company, Oneta Limited. The case centred around accusations of wrongly filed details on Companies House.

When being cross examined in court the Judge said ‘he seemed to pause quite a bit before replying to the questions’. Suspicions were raised further when Oneta’s counsel informed the Judge that she could hear ‘an interference coming from around Mr Jakstys’. Also, an interpreter, sitting in the witness box alongside Jakstys, confirmed she could also ‘hear interference’.

‘After a few further questions… Mr Jakstys’ mobile phone started broadcasting out loud with the voice of someone talking.

‘There was clearly someone on the mobile phone talking to Mr Jakstys. He then removed his mobile phone from his inner jacket pocket. At my direction, the smart glasses and his mobile were placed into the hands of his solicitor.’

Jakstys first denied he was using the smart glasses to receive coaching/answers in court, but a photograph of his phone’s call log revealed that various calls were made to someone called ‘Abra Kadabra’.

Jaktsys first said it was a taxi driver, but ‘finally admitted that Dr Miliauskis as well as his current solicitor assisted him’.

‘Not only have I held that Mr Jakstys was untruthful in denying his use of the smart glasses and his calls to Abra Kadabra, but the effect of this is that his evidence is unreliable and untruthful.’

Before the metadata could be retrieved from his phone by the court, Jakstys told his barrister, Christopher Green that he had ‘been robbed of his two mobile phones and his passport’, but ‘no copy of a police report was produced’.

Dismissing the case, Judge Agnello stated: ‘I reject Mr Jakstys evidence in its entirety…He had a blatant disregard for the signing of the disclosure certificate and carrying out his disclosure obligations. ‘I do not consider that what is set out in his witness statements is actually his evidence in accordance with the statement of truth he signed.’

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17/04/2026

Unscrupulous tax agent lands his client with a £29k 'false expenses' claim bill. Thank you to AccountingWEB and Amy Good-Chin (FCA) Ⓥ for the write-up. See here: https://lnkd.in/er83dawe

🔔 Certainly recognised by us, this is a "disturbingly familiar tale [where], another taxpayer has landed himself with a hefty bill after allowing an agent to make spurious claims on his behalf. The underpaid tax from falsely claimed employment expenses and an undeclared benefit in kind totalled £29,000 and penalties were levied at £8,000."

Yasir Badoume... appointed Oxford-based firm Welcome Accountancy Services (WAS) as his agent.

"WAS submitted self assessment returns for Badoume for each of the years 2016/17 and 2021/22, including extensive, and in many cases implausible, expense claims. These included travel costs, insurance, uniforms and even “capital allowances for vehicle and phones”, significantly reducing his taxable income."

📢 opened an inquiry into Badoume’s 2021/22 tax return, requesting a detailed breakdown of the expenses claimed. WAS asserted that “by UK tax laws” taxpayers were allowed a flat 20% deduction of employment income as expenses!

Needless to say the FTT rejected this claim, stating that it did not believe anyone at WAS, a firm purporting to be “certified accountants”, genuinely thought that such an accounting practice existed. Tax deductions are only permitted where expenses are incurred wholly, exclusively and necessarily...

🔊 WAS later resorted to claim that all relevant records had been shredded, and that it was standard practice at that firm to do this was within six months. Things got worse. The FTT noted that the schedule provided could not be reconciled with the receipts relied upon and, in fact, “aggravated the situation because it made no sense whatsoever”.

🔉 WAS did not stop there. "It submitted a written complaint to HMRC relating to 18 similar cases, including Badoume’s. The complaint included an allegation that HMRC was racially targeting the firm given the demographics of its client base." Unsurpringly, these arguments failed to gain any traction.

The FTT judge concluded that Badoume had "knowingly authorised the agent and failed to provide any credible evidence that he was unaware of the claims being made. He continued to engage WAS even after receiving letters from HMRC that would have alerted him to the investigation, yet he made no attempt to contact HMRC or seek independent advice."

📣 Also it did not help that neither Badoume nor WAS bothered to show up to the trial! FTT clerks attempted four different telephone numbers to reach them. No witness statement and no skeleton argument had been submitted.

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10/04/2026

pure.tax.investigations

investigations into the largest corporates claw back £16bn in tax says the National Audit Office. Thanks to Jacob Grattage and ... see: https://lnkd.in/ev2x6Gs3

The NAO say the taxes recovered from those investigations doubled in three years with HMRC taking a ‘more hands-on approach’.

"HMRC collected £15.8bn in additional tax from 2,000 business in 2024-25, which is double the £7.1bn amount from 2021-22..."

"In 2025, the NAO said HMRC was investigating the tax affairs of around half of large businesses at any one time with a potential £52.6bn in potential taxes at stake.

"Nearly half (44%) covered three business sectors, banking, telecommunications, and retail." In total, £377bn was paid by large businesses in 2024-25.

See our own guide on HMRC's business tax enquiries into the largest corporates, to see how they are carried out and how they differ to routine business compliance checks: https://lnkd.in/eBUxeH8d