Fraudsters bought £6m of supercars tax-free in blue badge VAT dodge
FRAUDSTERS cheated taxpayers out of nearly £1million by exploiting a VAT loophole designed to help disabled drivers.
In a nationwide scam, blue badge holders living on disability benefits were paid by con artists to purchase £6million of supercars, a court heard.
The gang would then take advantage of a loophole that allows disabled people to avoid VAT on vehicles as long as they are adapted for personal use. The dealers paid £40 to make each luxury car comply – only to return them to their original condition and sell them at a huge profit.
Raymond Gordon, 57, Margaret Lunt, 68, Arthur Jackson, 62, and Martin Burke, 51 were the first to be prosecuted for such a scam, even though it is thought to have cost the Treasury millions across the country. All four suffer with genuine disabilities and were funded by unidentified criminals.
At Manchester Crown Court this week they admitted conspiracy to evade VAT after they acquired 122 tax-free cars worth £6million in 2007. These included a £56,000 Jaguar XK Sports, a £130,000 Bentley GTC and a £47,000 Audi Q7. The defendants used hundreds of thousands deposited in their accounts by the ringleaders to buy the cars and – using their legitimate disabled status – dodged VAT totalling £930,000.
Jobless Gordon, from Liverpool, earned £400 commission for each of the 52 cars – worth £2.5million – he bought for the criminal gang.
In one busy week, Jackson, of Sale near Manchester, snapped up four Bentleys, realising this was the quickest way to make money.
Nicholas Clarke QC, prosecut- ing, said: ‘This had become a notable problem across the country and many garages were approached by HMRC who were selling more than their fair share of cars.
‘Various proposals have been made but there have been no rulings to stop this directly and HMRC were reluctant to prosecute those involved.’
Mr Clarke said all the vehicles were in high demand, with buyers often required to go on waiting lists. They were then sold on within a day or so by the gang.
Simple adaptations were made, such as a modified steering wheel, which cost as little as £38 and could easily be reversed.
Gordon was jailed for 18 months for defrauding HMRC of £458,000.
Lunt, a mother of three from Chester, received a 12-month suspended jail sentence for her role.
Jackson received eight months suspended for two years, while Burke, of Poynton, Cheshire, was sentenced to six months suspended for two years.
Their lawyers argued in mitigation that the defendants suffered from disabilities and had been acting on the instructions of out- siders. Arthur Gibson, defending Gordon, questioned what the dealerships had known. He said: ‘A disabled, unemployed Scouser walking into a dealership and purchasing a vehicle for £100,000 – if that doesn’t raise suspicion then I really don’t know what does.’
Judge Suzanne Goddard said: ‘This is not a victimless crime – it’s the public at large that suffer.’ In November 2012, HMRC changed the VAT law, introduced by then chancellor Gordon Brown in 2001, so that adaptations on cars for the disabled needed to be ‘permanent and substantial’.