Two directors of a Whittlesy recruitment agency who stole more than £245,000 by pocketing their employees’ tax and National Insurance Contributions (NICs) and failing to pay their VAT bills have been sentenced.
Mahmud Hussain, 44, and Iftekhar Rehman, 28, both directors of One Stop Recruitment (Nationwide) Limited, which was based at Unit 1a Kings Dyke, Whittlesey, used the Pay As You Earn (PAYE) system to deduct Income Tax and NICs from their employees’ wages, but instead of paying the money to HM Revenue and Customs (HMRC), they pocketed the cash.
An HMRC investigation into the tax affairs of the men, both from Peterborough, also revealed they hadn’t paid employer NICs or VAT, using the money to buoy up their business.
Paul Barton, Assistant Director, Fraud Investigation Service, HMRC, said: “Hussain and Rehman used their employees Tax and National Insurance to fund the business at their expense.
“In addition Hussain and Rehman failed to pay the VAT that was owed, giving them an unfair advantage over their competitors and other honest businesses that pay what is due.
“This fraudulent behaviour is never acceptable and HMRC will work to bring to justice anyone involved in this type of criminality. If you have information about suspected fraud please contact our 24 hour Hotline on 0800 59 5000.”
Mahmud Hussain, formerly of Fulbridge Road, Peterborough, was today, Friday January 8, jailed for 15 months and Iftekhar Rehman, also of Fulbridge Road, Peterborough, was given 41 weeks in prison, suspended for 18 months, as well 300 hours of unpaid work.
Hussain and Rehman, who traded as One Stop Recruitment (Nationwide) Limited, provided factory workers and labourers for seasonal work.
The pair were caught after HMRC officers visited their premises to inspect business records.
The officers found payroll details for 150 employees, who wrongly thought that their tax and NICs totalling £127,033 had been paid to HMRC. Further investigations also found that £118,311 was owed in unpaid VAT.