Leeds company director hid sales in failed bid to avoid paying £180,000 in VAT

Ilyas Elmi Hode, who ran two security companies in the city, hid sales to evade paying more than £180,000 in VAT, an investigation by HM Revenue and Customs (HMRC) revealed.

The 38-year-old also falsely claimed Tax Credits and lied on tax returns to evade paying Income Tax and National Insurance.

Hode had told HMRC that his business made £25,000 a year - but in reality he made more than £250,000.

He closed his company, Siti Security and Cleaning Limited, after HMRC started looking into his tax affairs in 2016 and set up a new company with friend Mohamed Abdi Godir.

Godir, 43, of St Wilfrids Avenue, Leeds, was the named owner of that company but investigations revealed Hode set up and ran the business entirely. Investigators found he had also continued to steal VAT.

Sandra Smith, assistant director of HMRC's Fraud Investigation Service, said: “Hode lied over and over again to steal taxpayers’ money. He knew HMRC was closing in on him and foolishly thought he could carry on cheating the public purse by setting up a new business.

“Tax fraud takes money from the vital public services we all rely on. This money could have paid for eight new NHS nurses."

Investigations into Hode’s tax affairs began when HMRC discovered sales invoices issued to a customer worth £250,000, but no VAT had been charged or paid to HMRC.

Officers visited his company premises at Mabgate Business Centre, Leeds, in March 2016 and Hode told them his company made around £25,000 a year. He also claimed the company had one customer and one bank account.

But following the visit, officers found more invoices, details of another bank account and established that the company was paid more than £250,000 in eight months.

Hode, of Beech Avenue, Leeds, was arrested in November 2016 at his home where officers then uncovered sales documents worth more than £83,000 for a company named Top Alliance Management Limited.

They found the business was a continuation of Siti, which had closed in May 2016. The company was owned by Godir, but was set up and controlled by Hode. More sales invoices totalling £527,209 which had not been declared to HMRC were found as well.

The investigation established Hode had failed to register for or pay VAT and stole £181,988 between July 2015 and November 2016. He also pocketed £6,263 Income Tax and £4,305 Tax Credits to which he was not entitled.

Hode was found guilty of tax fraud and sentenced at Teesside Crown Court on April 20. He received two years in prison, suspended for two years, and 300 hours of unpaid work.

The case concluded yesterday when Godir was sentenced at Teesside Crown Court to 75 hours of unpaid work for evading Income Tax and stealing Tax Credits totalling £8,539.

Anyone with information about tax fraud cane report it to HMRC online or via the Fraud Hotline on 0800 788 887.