Burnley boss banned for £111k tax fraud

Burnley boss banned for tax fraud
Peninsula Logo

Peninsula Team, Peninsula Team

(Last updated )

The director of a construction company has been given a 10-year ban after fraudulently claiming a £111,527 Construction Industry Scheme (CIS) payment from HMRC

Penka Vasileva ran Penka Services Ltd, a Burnley based residential construction company, which was set up in July 2019. Immediately after establishing the business, Vasileva registered under the CIS scheme as both a contractor and a sub-contractor. The fraudulent CIS payment of £111,527 from HMRC related to the tax period ending 5 February 2020.

Under CIS rules, contractors deduct money from a subcontractor’s payments and pay it to HMRC. The deductions count as advance payments towards the subcontractor’s tax and National Insurance. Contractors must register for the scheme.

The repayment from HMRC was paid into a third party contractor’s bank account, named as company ‘y’ by the Insolvency Service.

During a subsequent investigation into the CIS claim, HMRC reviewed the bank statements of company x, another third party, but they were unable to trace any payments made by them to PSL.

HMRC also reviewed the bank statements of company y and was unable to trace any payments received from company x; it also found that company x entered liquidation on 20 December 2019.

As a result of the investigation, HMRC obtained an order to have company y’s bank account frozen on 14 July 2020.

HMRC subsequently confirmed that following a forfeiture application, it received the funds that were held in the frozen bank account.

Bulgarian national, Vasileva did not produce any accounts and records to support the CIS claim made. She has been banned from being a director of a company for 10 years from 3 August.

Penka Services was dissolved on 9 July 2022 following a voluntary winding up petition issued on 26 February 2021. The insolvency report by Begbies Traynor showed that the company owed HMRC £46,888 at the time of dissolution although the tax authority had not submitted a claim for repayment.

For information on disciplinary sanctions, visit BrAInbox today where you can find answers to questions like Can I demote someone and give them a formal warning at the same time?

Related articles

  • health and safety in cosmetics

    Blog

    Is talc-based makeup exposing women to asbestos?

    Scores of British women are bringing lawsuits to US courts, claiming they have contracted mesothelioma. But the defendant isn’t a construction company exposing its workers to asbestos. It’s cosmetics giant Johnson & Johnson, and the products supposedly causing this fatal disease are beauty products.

    Peninsula TeamPeninsula Team
    • Health & Safety
  • london skyline

    Blog

    London ranked eighth most expensive global city

    Soaring rents, inflationary pressures and the cost of living crisis sees London move up the rankings as one of the most expensive cities to live and work

    Peninsula TeamPeninsula Team
    • Pay & Benefits
  • polling station

    Blog

    What could a general election mean for employment law?

    Here's what the big three have each vowed to do should they come away with an election win.

    Peninsula TeamPeninsula Team
    • Employment Law
Back to resource hub

Try Brainbox for free today

When AI meets 40 years of Peninsula expertise... you get instant, expert answers to your HR and Health & Safety questions

Sign up to our newsletter

Get the latest news & tips that matter most to your business in our monthly newsletter.