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Couple Who Made £350,000 At Car Boot Sales And On Ebay Are Jailed. . . Because They Didn't Pay Tax


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http://www.dailymail.co.uk/news/article-2176869/Gail-Fox-Ronald-Donkin-Couple-260-000-car-boot-sales-jailed-dodging-tax-takings.html

A couple who evaded paying tax on £260,000 they made by trading at car boot sales have been jailed.

...

Fox made an extra £90,000 selling property on eBay. They both admitted money laundering during an earlier court hearing.

Fox, 47, admitted cheating the Inland Revenue out of almost £50,000 in unpaid taxes.

She also pleaded guilty to a charge or mortgage fraud in relation to giving false information while securing a loan to buy a council house.

Considering the cash they had did they really need a loan?

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Doesn't seem to add up to me. Why would they need to lie to get a mortgage, especially on a council house. Why is it a proceed of crime (unless they stuff they were selling was knicked) or does it become a proceed of crime simply by not paying tax on it?

Seems a law for some and not others to me.

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Doesn't seem to add up to me. Why would they need to lie to get a mortgage, especially on a council house. Why is it a proceed of crime (unless they stuff they were selling was knicked) or does it become a proceed of crime simply by not paying tax on it?

Seems a law for some and not others to me.

Failure to declare taxable income is a criminal offence and thus comes under the Proceeds of Crimes Act. As you say by simply not paying tax on it the money becomes a proceed of crime.

Neat, for the authorities that is.

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Doesn't seem to add up to me. Why would they need to lie to get a mortgage, especially on a council house. Why is it a proceed of crime (unless they stuff they were selling was knicked) or does it become a proceed of crime simply by not paying tax on it?

Seems a law for some and not others to me.

The lies for the mortgage were almost certainly because they knew that they had no proof of income, as any legitimate accounts would have meant some form of tax return. There is likely a similar reason as for why they chose to buy via mortgage, instead of with cash (they certainly had a lot of it) - too many questions would get asked about where the cash had come from.

As for proceeds of crime. Yes. Tax evasion is a crime, and any money obtained because of it, becomes subject to seizure (as does any profit made from investing that money elsewhere).

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Failure to declare taxable income is a criminal offence and thus comes under the Proceeds of Crimes Act. As you say by simply not paying tax on it the money becomes a proceed of crime.

Neat, for the authorities that is.

Wrong.

The proceeds of crime in legal terms (under POCA 2002) is only the "criminal benefit" - in this case the evaded tax. Of course, tax evasion carries penalties of up to 100% of the evaded tax (plus interest etc), and they will have to pay legal costs etc, so will likely be left with nothing in this case, but you are wrong if you think that all money is classed as proceeds of crime if tax isn't paid on it.

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Failure to declare taxable income is a criminal offence and thus comes under the Proceeds of Crimes Act. As you say by simply not paying tax on it the money becomes a proceed of crime.

In practice that's at HMRC's discretion, isn't it?

They seem to exercise discretion in not going after Big Issue sellers.

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Article doesnt say how they were caught? Would be interesting to know what it was that led them to being caught. Random HMRC checks/investigations? or 'sloppiness' on their part (e.g suspicions aroused through the mortgage application? etc)

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Article doesnt say how they were caught? Would be interesting to know what it was that led them to being caught. Random HMRC checks/investigations? or 'sloppiness' on their part (e.g suspicions aroused through the mortgage application? etc)

probably flagged up on HMRC random checks, because mortgage taken out, but no tax being shown as paid by the mortgagee..someone looked at it...had time on their hands and followed it through... discrepancies are flagged up thousands of times a day but then it`s some bad luck if a monkey at HMRC follow it through, along with carelessness on the perpetrators part, in the first place.

Edited by GinAndPlatonic
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So let me get this straight.

Two people who decided not to pay protection money to the mafia, are criminals and go to jail, and it is the mafia that sends them their.

Maybe only i can see the irony in this?

Like injin says, if you dont pay the criminals they come for you with guns and cages.

Yup. When you can see clearly that a spade is a spade, you can't ignore the fact that taxation is theft.

It is high time that no one was able to steal with impunity, including the state.

edit: typo

Edited by Traktion
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Wrong.

The proceeds of crime in legal terms (under POCA 2002) is only the "criminal benefit" - in this case the evaded tax. Of course, tax evasion carries penalties of up to 100% of the evaded tax (plus interest etc), and they will have to pay legal costs etc, so will likely be left with nothing in this case, but you are wrong if you think that all money is classed as proceeds of crime if tax isn't paid on it.

Posting from Accounting Web:

Should one feel sorry for Gareth Edward Steed?

Mr Steed engaged in what the Crown Court judge described as "moonlighting" - legitimate trading which he failed to declare for tax. Indeed it seems he was not on HMRC's 'radar' at all. He received no tax returns and he failed to notify HMRC of his chargeability to tax.

It seems that he was a 'grafter' prepared to do anything legitimate to make money - whether that involved buying and selling second hand cars, undertaking building work, or whatever. Perhaps he also was engaged in some rather less legitimate 'business' too.

But somehow he was 'rumbled'. Ultimately he was charged with three counts of tax evasion. As often happens in criminal cases there were clearly some sort of discussions between the two sides before the matter came to court. As a result the original three charges were dropped and one new charge was introduced - to which Mr Steed pleaded guilty.

The charge was one of common-law 'cheat' in that between 1 April 2003 and 31 December 2004 Mr Steed failed "to submit declarations of tax due including the proceeds derived from the sale of vehicles, furniture and tools together with that from building work".

Mr Steed accepted that, as a result, a tax liability of at least £3,558 had arisen for 2002/03 which had escaped self-assessment.

But that was not the end of Mr Steed's troubles because, following his conviction for 'cheat' HMRC pursued confiscation proceedings.

They argued that he had a 'criminal lifestyle' for confiscation purposes on the basis that he had committed an offence over at least 6 months from which he had gained a benefit of at least £5,000 (s75 PoCA 2002). In that connection HMRC pointed out that had a tax return been submitted for 2002/03 it would have triggered not only payment of £3,558 for 2002/03 but also a payment on account for the following year. In consequence the amount involved exceeded £5,000.

The Crown Court judge agreed. Applying the 'criminal lifestyle' assumptions the judge found that Mr Steed was unable to produce evidence to rebut the statutory assumptions that amounts expended by him and assets held by him had been obtained in consequence of unspecified general criminal conduct on his part. He made a confiscation order against Mr Steed for £707,200 (with a four year prison sentence in default of payment by the due date).

That sum was Mr Steed's 'available amount', which is normally calculated to be the value of the defendant's gross assets less any liabilities secured on them (such as mortgages).

The Crown Court judge also formed the view that Mr Steed had probably been engaged in other criminal activity too. He said, "It may be that the defendant . . . would not be convicted on the criminal standard of all the matters to which I have referred. It is a question of viewing an overall picture and the conclusion I come to is that the overall picture supports the contention that it is more likely than not that he was involved in criminal conduct over and above the Count to which he pleaded guilty". He referred to "money-laundering, drug-dealing, the possession of goods bearing false trademarks with a view to sale, the evasion of duty and benefit fraud".

Mr Steed appealed. The Court of Appeal in a decision published on 1 February upheld the confiscation order and dismissed the appeal - Steed v R [2011] EWCA Crim 75.

In particular the Court of Appeal recognised that the proceeds derived from legitimate trading (such as sales of used cars) were not themselves benefits of criminal conduct. Rather the benefit consists of the tax evaded.

The Court of Appeal accepted that "where a trader evades tax and proves, on the balance of probabilities, that his assets and expenditure derived from legitimate trading on which he paid no tax then the trader will have rebutted the statutory assumptions". In that event the only benefit remaining for confiscation would be an amount equal to the tax evaded.

But crucially it also noted that the Crown Court judge had found that "the appellant was unable to establish on the balance of probability the extent to which the sources of his assets and expenditure were legitimate and the extent to which they were illegitimate. Since he was unable to prove what proportion was legitimate the consequence was that in relation to any given asset or item of expenditure he could not prove that the property was not held by him as a result of his general criminal conduct".

It followed that he was unable to rebut the statutory assumptions in relation to monies he had expended and assets which he held.

So the financial consequences of Mr Steed's failure to notify chargeability to tax have been rather more serious than he may have anticipated - almost 200 times more serious!

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To me a criminal is someone that attacks a pensioner in the street, or something.

Apparently, just engaging in a bit of accountancy chicanery with a paper trail is what stops you being one.

I often feel that with people engaged in this sort of grafting type lifestyle they're often just ignorant or not sufficiently sophisticated to stay above board. I think a lot more would be on rather than off-grid were it simpler. For example, a jobbing bricklayer decides they want to do it properly gets a ton of paperwork bureaucracy, has to discern between claimable and unclaimables against tax etc.a and they just think sod it I'II just carry on cash-in-hand.

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So let me get this straight.

Two people who decided not to pay protection money to the mafia, are criminals and go to jail, and it is the mafia that sends them their.

Maybe only i can see the irony in this?

Like injin says, if you dont pay the criminals they come for you with guns and cages.

Well, I don't think he was collared for not paying tax - but for not declaring. If you declare your tax and don't pay I would have thought they wouldn't be turning up with guns - just a removal van?

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...the judge found that Mr Steed was unable to produce evidence to rebut the statutory assumptions that amounts expended by him and assets held by him had been obtained in consequence of unspecified general criminal conduct on his part.

So guilty until proven innocent. WTF?

Gerard on camera, assaulting a man : walks free

Terry on camera, racially abusing : walks free

PC Harwood on camera assaulting a man who minutes later dies : walks free

Bob Diamond : in emails and according to his most trusted employee, caught defrauding the libor market, worth £350bn : walks free

....

People in high places (claim to have) missed the bubble. They are in danger of missing something much more serious.

Edited by Sledgehead
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The last thing the state wants is a couple of clever clogs able to trade themselves a living with no help from the state.

No, that wont do at all.

'The system, your're either in it, or we ****** you up'

Because we have a principle in the UK that we pay tax on income. If I flog my old CDs at the car boot sale it is mine to keep. If I buy CDs with the express intent of selling them at a car boot sale and making a profit, then it is taxable income. You may as well apply your argument to any commercial venture that buys produce at one price and sells for another, be it BP or GSK.

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