Convicted perjurer defrauded taxman to the tune of £1 million

HMRC established that Arshid caused the company to under-declare and conceal liabilities. Picture: PA
HMRC established that Arshid caused the company to under-declare and conceal liabilities. Picture: PA
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A convicted perjurer ran a £1 million tax scam that funded home improvements and private education for his kids, tax bosses have said.

Mohammed Arshid – who was last year jailed for 17 months after he admitted lying in court in an extortion trial – has been banned from acting as a company director for 11 years.

His wife, Maqsoodan Arshid, has also been banned for two years for allowing the scam to happen.

The couple were both directors of Nethergate Newsagents Ltd in Dundee which was placed into compulsory liquidation in July 2014 with debts of £1,044,973.

This took place after a five-year investigation during which HMRC established that Arshid caused the company to under-declare and conceal liabilities in relation to PAYE, National Insurance Contributions, VAT and corporation tax.

Arshid, 58, submitted false end-of-year returns for 17 years, concealing sales in VAT returns for a period of 16 years, submitting incorrect company tax returns over three consecutive financial years between 30 November 2005 and 30 November 2007.

He then understated the company’s sales for the next six years.

The pair admitted that their scam allowed their family members to make personal gains – including home improvements, private education and employee wage top-ups.

An investigation by the Insolvency Service found Arshid had “breached his fiduciary duty” as a director by submitting false information to HMRC resulting in lost revenue on PAYE Tax, NIC, VAT and corporation tax totalling £1,020,423.

His wife was disqualified for “abrogating her duties as a director”, allowing Arshid the freedom to commit the offence, which they both personally benefitted from.

Robert Clarke, group leader of insolvent investigations north for HMRC, said: “These bans should serve as a warning to other directors tempted to help themselves first; you have a duty to your creditors and if you neglect this duty you could be investigated by the Insolvency Service and removed from the business environment.”

Last year Arshid was jailed for 17 months for lying under oath to help clear a man accused of threatening a business associate with murder by the Taliban. Arshid pleaded guilty on indictment to a charge of perjury.