Construction director banned over £170k tax fraud

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Peninsula Group, HR and Health & Safety Experts

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A businessman has been disqualified as a company director for a total of 12 years after falsely claiming £170,000 through an HMRC tax scheme

Stoyan Petkov Kostov, from Burnley, fraudulently claimed construction industry scheme (CIS) payments totalling at least £170,284 from HMRC between 22 April 2019 and 22 January 2020.

Under the CIS, contractors deduct money from a subcontractor’s payments and pass it to HMRC. The deductions count as advance payments towards the subcontractor’s tax and national insurance.

On 10 January 2019, Kostov Group Ltd (KGL), where Kostov acted as the sole director, registered under the CIS with HMRC as both a contractor and a subcontractor.

KGL submitted CIS repayment claims to HMRC during the relevant periods, based on payments allegedly received from a third-party contractor company, resulting in KGL receiving payments totalling at least £170,284.

However, upon an investigation into their claims, HMRC reviewed the company’s bank statements and was unable to trace any payments from the third-party contractor company.

It also found that the third-party contractor company signed an application to strike off the company on Companies House on 1 January 2019 and it was later dissolved on 6 August 2019.

As a result of their investigation, the tax authority obtained an order to have KGL’s bank account frozen on 14 July 2020. It was also able to recoup funds that were held in the account.

According to the Insolvency Service, which issued the 12-year director disqualification, Kostov had ‘failed to deliver up any books and records’ to support the CIS claims made.

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