The taxi driver caught running a telephone con as a front for VAT fraud 
Andrew Penman says "This might just be the most brazen shyster I have ever encountered"
Ayub Khan played a key role in a fraudulent attempt to get a £2.6million VAT rebate.
The taxman spotted the scam and refused to pay, at which point you might think that Khan would decide it best to keep his head down.
Instead, the 55-year-old cab driver from Heald Green near Stockport decided to sue HM Revenue & Customs.
The scam is know as Missing Trader Intra-Community fraud and it costs Europe £74billion a year, according to the EU law enforcement agency Europol.
The case involving Khan is typical – apart from his insane decision to take HMRC to a tax tribunal.
Like most cases of Missing Trader fraud it involves mobile phones and a series of bogus trades between sham companies.
The objective of the con men is for one trader to charge VAT, which is not passed on to the taxman, and for another to reclaim it, saying they are entitled to a refund.
The taxman loses out because the company that should have paid VAT disappears, becoming the so-called Missing Trader.
Khan’s role showed all the hallmarks of the fraud.
He bought one of his companies, Horizon Import Export for just £150, and it rapidly went on to a multi-million pound turnover without spending a penny on investment, marketing or advertising.
And despite the fact that he knew next to nothing about the mobile phone trade.
When asked at the tax tribunal how he could become an overnight expert in the mobile phone market he said he’d bought a magazine from WH Smith’s: “Magazines give you quite a lot of information,” he claimed.
HMRC produced a stack of evidence to show that the deals on which Khan based his rebate claims were fake, including:
•He claimed to have bought mobiles worth £15million but could not say where they were at the time of the purchase, or even prove he knew basic details like what colours they were.
•He had no record of the unique identifying numbers on the phones, the IMEI code.
•He couldn’t provide evidence of written conditions that would feature in any genuine deal, such as payment dates. He insisted this was done verbally.
•Having bought the phones from one company, Khan maintained that he sold them to a second company, parting with £15million worth of goods without knowing their destination and before being paid. In total, Khan demanded two tax refunds, one of £1.6million and the other for a little short of £1million.
The tribunal told him, if I can paraphrase, to take a running jump.
It ruled: “His evidence was vague and at times he appeared determined to avoid answering questions.”
The judgment went on to say that “the conspicuous lack of clarity or formal record... was indicative of the fact that such legalities did not matter to the parties as they knew that the transactions were contrived”.
The panel was “wholly satisfied the actions and inactions of Mr Khan indicated he had actual knowledge the transactions were connected to fraud”.
The best bit?
Khan has been ordered to pay the legal costs of HMRC.
The weirdest bit?
When the Mirror met Khan this week he said that he was going to appeal.
source:
http://www.mirror.co.uk/news/taxi-drive ... ne-5186561
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