Two Whittlesey men jailed for five years each for £3.1 million income tax and VAT fraud

Stephen Moody (62) of Plough Road, Whittlesey, and David McDowell (56) of Cemetery Road, Whittlesey, were each jailed at Cambridge Crown Court for two years for failure to pay income tax and sent to prison for three years each, to run concurrently, for cheating the Inland Revenue.

The court had heard how an HM Revenue and Customs (HMRC) investigation in 2019 found the pair who ran City Staff, in Fengate, Peterborough, had underdeclared the business's turnover by almost £12 million, resulting in £2.8 million in unpaid VAT, alongside a further £339,000 in evaded income tax.

Dowell had been the original owner but had transferred it to Moody after being declared bankrupt in 2008.

The men had each pleaded not guilty to one charge of fraudulent evasion of income tax under the Taxes Management Act and not guilty to a separate charge of cheating the public revenue but were convicted at a hearing at Cambridge Crown Court on June 16.

Passing sentence on Friday, June 19, Judge Andrew Hurst pointed out that the offences had been carried out over five years between April 2014 to April 2019.

He said: “Other people were filling out tax and VAT forms and self assessment forms and trying to account for every £1.39.

“You worked hand in hand over five years to defraud the HMRC of tax due either to help keep the business going or to enrich yourselves, we will never know.

“The money must have gone somewhere.”

Mr Hurst described the situation as bewildering as the business, which carried out temporary staff recruitment and assembly/packaging, had been a commercial success.

He said the business benefitted from a long term client that provided 90 per cent of the trade and that the company had run 24 hours a day, seven days a week.

He said: “It is a trite observation, but everyone is obliged to pay income tax and businesses are obliged to pay VAT due.

“But you seemed to see it as an optional extra.

“You have obvious disdain for the tax system.”

He said that HMRC had at one stage offered a lifeline to Moody to provide a complete and accurate disclosure of all conduct that had led to irregularities in their tax affairs but had chosen not to take it.

In defence, the court was told that Moody had worked all his life and was working up to the day of the trial and was married with grown up children and that what had occurred was not ‘part of a pattern that had characterised his life.’

The court was also told that McDowell had previously been in the RAF and had fought for his country, had recently suffered a heart attack and was worried about medical care in prison.

After the hearing, Richard Greaves, Assistant Director at HMRC's Fraud Investigation Service, said: "Moody was offered an early opportunity to put right his offending by admitting his deceit and making full payment of the tax, interest, and penalties through a COP9 offer.

“Instead of making that full, open and honest disclosure, he has now faced the consequences in court, alongside McDowell.

"Tax crime is not victimless – it deprives the public purse of money that pays for our NHS, education and emergency services.”