Trio of fraudsters sentenced over £1,000,000-plus VAT scam

Lee Hickinbottom, 49, was sentenced to eight years’ imprisonment after being convicted of multiple counts of cheating the public revenue (ie HMRC and DWP). Tabatha Knott, 34, was sentenced to 18 months’ imprisonment suspended for two years after being convicted of one count of cheating the public revenue (HMRC) and one count of money laundering.

David Hickinbottom, 36, was sentenced to 18 months’ imprisonment suspended for two years after pleading guilty to one count of cheating the public revenue.

The criminal enterprise involved the defendants using a company’s VAT registration to make fraudulent VAT repayment claims towards the end of its life and after it had gone into liquidation. Businesses who have charged customers prices less VAT than they have paid on purchases can then put claims to the HMRC to repay the difference.

Between September 2013 and November 2014, Serenity Travel Ltd over-claimed £43,177 in VAT repayments. Knott was the director of this company, but was assisted by Lee Hickinbottom.

Company registration

Once Serenity Travel Ltd had gone into liquidation, Lee Hickinbottom registered a company called Serenity Community Transport Ltd, with him named as a director. There is no evidence that this company ever did any legitimate trading, but Lee Hickinbottom used false invoices to support his fraudulent VAT returns.

The legitimate companies with whom he purported to have traded were clear they had not traded with Lee Hickinbottom in any capacity. Serenity Community Transport Ltd claimed £1,290,326.93 in VAT (relating to over £7 million in fake invoicing).

Money from the fraud was used to buy a café and newsagents in Solihull. Rebranded as ‘Cornyx Corner’, the businesses quickly failed in the hands of Lee Hickinbottom. Once HMRC had intervened and stopped VAT repayment claims being paid to Serenity Community Transport Ltd, Lee Hickinbottom continued to make false VAT repayment claims of over £50,000 in a bid to keep the new businesses afloat.

Taxpayers’ money was spent on Lee Hickinbottom and Knott’s lifestyles: cars, jewellery, £1,500 on Lego, home improvements, investments in other companies, loans and gifts to family.

Money transfers

Although Knott had no formal links to Serenity Community Transport, she benefited from money being transferred to her from these frauds and the lifestyle Lee Hickinbottom provided for her.

Before the trial, Lee Hickinbottom admitted to cheating the revenue with regards to false claims for Job Seekers’ Allowance and Employment Support Allowance by failing to declare savings and income during the time the companies were operating. He received £28,520.26 which he was not entitled to receive.

David Hickinbottom had two companies. Neither were registered for VAT, but he charged his customers VAT totalling £8,322 which he was not entitled to do. He pleaded guilty to this offence of fraud before the trial.

Extravagant lifestyle

Anamarie Coomansingh of the Crown Prosecution Service said: “Taxpayers’ money, which should have been spent on vital public services such as the NHS, education and social care was instead used to fund the unearned and extravagant lifestyle these defendants enjoyed.” Coomansingh continued: “The Crown Prosecution Service will be inviting the court to put in place measures to prevent Lee Hickinbottom, a career criminal, from committing similar offences in the future. We will also be pursuing confiscation proceedings against the defendants in order to strip them of any money gained from their criminal activity.”

The Crown Prosecution Service is committed to continuing its work alongside the law enforcement and investigatory authorities in order to bring to justice those fraudsters who target the taxpayer.