In a bizarre incident, a British man in Wales’ Cardiff, UK received numerous unpaid tax bills, which amounted to 5,00,000 pounds from 11,000 firms, mostly from China after these companies fraudulently used his residential address to register for VAT, BBC reported.
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Dylan Davies, the recipient of these bills from HM Revenue & Customs (HMRC) went to check his post box in November last year, where he found plethora of brown envelopes. It soon swamped Davies in comparison by the amount that continued to flood in over the ensuing six months. He raised the issue with the police and HMRC but the brown letters just kept coming, the report added.
He said that the “horrendous” situation had left him more worried in the sights of bailiffs who could come “charging the door down.”
According to financial crime consultant Graham Barrow as quoted by BBC, the case is being suspected as a fraudulent activity from the overseas companies. “It looks to all intents and purposes like VAT fraud,” he said.
Barrow also urged HMRC to to completely “tighten up” the VAT registration process for foreign companies.
Subsequently, the head of HMRC took the issue into account when MPs who sit on the Commons public accounts committee raised the issue. Jim Harra, the head of HMRC in his response said that in its ongoing investigations “so far have found no evidence of fraud or fraudulent intent” relating to the incident, according to a report by Independent.
Harra however, admitted that 11,000 firms had changed their registered address to that of Davies over a six-month period, and said that 2,356 of the businesses owed a tax debt, the report added.
According to HMRC data, around 70% of the firms registered on Davies’ address are being operated on online marketplaces, which provided data to the taxman. There is no record that the remaining 30% have sold goods in the UK or have any outstanding VAT to pay.
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Meanwhile, a spokesperson from HMRC said, “We are reviewing our operational processes for managing high volume address changes, including understanding any vulnerabilities in our systems associated with this behaviour.”