Nicholas McLeman considers the recent High Court case of Mercy Global and explains HMRC’s various powers to pursue liabilities from directors personally.
The library of case law concerning tax fraud matters is ever growing and the recent High Court case of Mercy Global Consult Ltd (In Liquidation) V Adegbuyi-Jackson & Ors [2023] Bvc 45 (‘Mercy’) highlights the legal recourse available to companies to hold their directors to account for fraudulent transactions.
Mercy provided umbrella payroll services for workers in the healthcare sector. The company was concerned with the provision of workers to recruitment agencies, who would then make an onward provision of these workers to end users, most notably NHS Trusts.
HMRC launched a labour supply chain investigation into the company, and it was alleged that it was embroiled in a large-scale fraud. The company’s director did not fully co-operate with HMRC’s investigation and so in the absence of full business records, HMRC raised best-judgement VAT assessments on the company totalling over £21 million.
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