News - Financial crime
Mortgage Solutions | 30 Oct 2013 | 15:32Follow @JuliaRampenIW
An on-the-run landlord can expect to spend eight years in prison if caught for a £1.2m tax fraud.
Mohammed Kasim Farook, 53, bought a commercial property in Luton in 2001, where an agent charged the tenants VAT on his behalf. The landlord, who was living in Dubai, did not pay any tax on his UK income.
HM Revenue and Customs criminal investigation assistant director Andrew Sackey said: “Farook cheated not only the taxpayer but also his tenants. This was fraud on a large scale and was totally unfair to other landlords who play by the rules and pay the correct tax.”
The fraud came to light after one of the tenants questioned the VAT number. Farook was arrested on 20 September 2012 and charged with two counts of cheating the public revenue in early 2013.
He claimed he was unaware his agent was charging tenants VAT. He said because he lived in Dubai, he did not think he had to pay any tax on his UK income.
However, he absconded before the trial began and was found guilty and sentenced in his absence by Luton Crown Court.
Earlier this year, HMRC created a number of taskforces to crack down on overseas landlords who could be avoiding paying tax.
A National Landlords Association spokesman said: "Income from rental property, including overseas property must be declared to HMRC. Not doing so is clearly wrong and does all law abiding landlords and tenants a disservice.
"While no-one enjoys paying tax on their income the NLA firmly believes that if we all pay what is due, when it is due, our individual burden will be reduced."
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