Agency bosses banged up for evading £5m HMRC bill

Two elderly men, who pheonixed a marketing agency six times over a 16-year period to avoid paying more than £5m they owed to HMRC, ripped off their own staff and used company funds to enjoy a lavish lifestyle, have, along with an accomplice, been jailed for a combined 12 years.

Southwark Crown Court heard how Gareth Onions, aged 66, and his business partner David Webb, aged 73, bought field marketing agency The Brand Company in 1997, which specialised in helping consumer brands promote their products in retail outlets.

However, working with HMRC’s Fraud Investigation Service, the Insolvency Service uncovered that The Brand Company submitted their last annual accounts in 2002 before defaulting on their tax liabilities, resulting in a cumulative debt of more than £5m to HMRC. This was despite the marketing company continuing to deduct tax and National Insurance from their employees’ salaries.

To help hide their activities and to prevent any recovery action by their creditors, including HMRC, Onions and Webb repeatedly closed the operating company before purchasing the assets themselves through a new company in a succession of pre-pack administration deals.

This allowed them to start up all over again under a different name so that The Brand Company could continue trading undetected.

Further enquiries by the Insolvency Service also found that the pair had both been disqualified twice while running the marketing company. Webb received directorship disqualifications in 2008 for five-and-a-half years and a further five-year ban in 2010, while Onions was banned in 2010 for four years and another five-year ban in 2013.

The bans should have restricted their ability to manage limited companies but this did not deter them. Throughout this period, not only did Onions and Webb keep the same workforce and deal with existing customers, the pair enjoyed substantial salaries and lavish expenses all billed to the company. This included private healthcare, expensive company cars, golf club membership and the use of company credit cards for personal use.

However, the last of the seven companies, DSPS Field Marketing Ltd, went into Creditors Voluntary Liquidation in April 2013 after which it was uncovered that Onions and Webb not only owed millions to HMRC but they had also breached their directorship disqualifications.

Onions was jailed for five years and six months, while Webb was jailed for four years and two months. The pair, both from Tanworth-in-Arden, Warwickshire, were joined in court by Glenn Delany, aged 67, from Cotteridge, Birmingham, who was sentenced to two years imprisonment, suspended for two years, after he helped Onions and Webb carry out their offences.

Ian Hackett of HMRC’s Fraud Investigation Service said: “Onions and Webb deliberately stole taxpayer’s money to fund their lifestyle and showed a total disregard for their employees.

“By working with partners such as the Insolvency Service, we can effectively tackle tax evasion, which deprives us all of money that should be funding our public services. We encourage anyone with information about tax evasion to report it online or call our Fraud Hotline.”

Insolvency Service chief investigator Glenn Wicks added: “Onions and Webb employed duplicitous tactics for the majority of The Brand Company’s lifetime, in attempt to avoid paying tax, redress any losses owed to their creditors and comply with their disqualifications.

“Thanks to the joint work with HMRC, the courts have recognised the severity of their unscrupulous conduct and their sentences should serve as a stark warning to others that we will investigate those that think they can flout their responsibilities as directors and enrich themselves at the expense of the public purse.”

His Honour Judge Hehir also made an order for Proceeds of Crime Act asset confiscation proceedings against all three men.

TOPICS:agency news fraud HMRC The Insolvency Service