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Home Fraud: Phoenix Fraud

Phoenix company fraud is related to but quite different from company fraud. It is committed where following the failure or declaration of bankruptcy by a company, for any number of reasons, the Directors then set up another company immediately thereafter; known as the Phoenix Company. While this may be perfectly legitimate, the crime in itself occurs as a result of the Directors or Shadow Directors withdrawing all the funds from the failed company and leaving their creditors out of pocket. Creditors in this context may involved the HMRC where the Directors fully implement and effect pre-insolvency transfer of assets to the new company at a price that is significantly below actual market below market value or fail to account for VAT.

Of particular interest or target, as it were, to the HMRC is the fashion or clothing industry; also known as the rag trade. The HMRC believes that in many cases, companies in the clothing business are insolvent from inception to the time they declare bankruptcy and that such companies are notorious for setting up subsequent phoenix companies for the purpose of evading their tax liabilities and cheating the revenue. This is a rather generalist view and not necessarily accurate. Unfortunately, some legitimate companies have been unnecessarily targeted by the HMRC simply because they belong to the industry believed to be notorious for setting up phoenix companies for fraudulent purposes.

If your company belongs to the clothing industry or any other related or unrelated industry and you believe you are being shadowed by an investigating authority on suspicion of committing phoenix company fraud, get in touch with us today for expert legal advice and assistance. Our criminal law solicitors in London have substantial experience in defending Phoenix Company Fraud allegations. We possess the knowledge and expertise with which our clients can be most proactively and robustly defended against allegations of this nature. Our tax fraud lawyers will ensure that no stone is left unturned in preparing your defence and securing the best possible result in your matter. Call us today for an initial discussion of your case.

 

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