Over £17m of fraud reported in region last year says BDO

MORE than £17m of reported fraud was committed in Yorkshire last year, according to a new report, which suggests actual fraud may be significantly higher.

Accountancy and business advisory firm BDO’s 2012 Fraud Track report showed Yorkshire fraud was lower than any other UK region. The Midlands, with £250m, and the North East, with £155m, were the worst regions for fraud.

The total number of reported fraud cases in Yorkshire was 44, representing more than 10 per cent of UK reported fraud.

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Simon Bevan, Leeds-based partner and head of fraud services at BDO UK, said: “There is still real concern that the vast majority of both public and private sector fraud is not reported, with business owners not wanting to involve the police in such matters unless absolutely necessary. With that in mind, the true cost to the region is likely to be much higher.

“In the last 18 months we have experienced a significant shift to the North with much more of our work based around the Yorkshire region and therefore anecdotally we know there is a bigger problem here than the figures suggest.

“We know that Yorkshire businesses are intent on stamping out fraud from the relationships we have but the results suggest they may be choosing a different approach to other regions.”

The industry most susceptible to fraud was public administration, representing £615m nationally and £7m in Yorkshire.

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The finance and insurance sector reported its lowest level of fraud in five years at almost £0.5bn in 2012 nationally. However, fraud in this sector in Yorkshire accounted for around 30 per cent of all fraud.

Retail, manufacturing and health and social care together accounted for a further 20 per cent of fraud in Yorkshire.

Across the UK, the total value of reported fraud in 2012 fell by a third to £1.37bn. However, tax fraud, totalling £603m, has doubled in the past two years.

BDO’s fraud survey includes all reported fraud cases worth more than £50,000. Yorkshire cases included a £3.3m fraud by a butcher in Leeds who invented a chain of 14 shops to avoid paying the tax man, a £1.5m car wash fraud in Sheffield and a number of VAT and mortgage fraud cases.

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VAT sales tax fraud alone accounted for 41 percent of the total UK fraud figure. The current UK VAT gap, the theoretical difference between what the Government expects to collect in sales tax and what it actually collects, is around £10bn, with fraud accounting for about one third of this.

That equates to £3.3bn missing from the public purse every year.