Secret deal allowed fraudsters to go free

law-abiding taxpayers and the integrity and effectiveness of our public services. Financial crime hurts people and destroys lives.

“We need to deter, detect and prosecute financial crime with as much vigour as we employ in other criminal cases.”

He said he would raise the case with the Director of Public Prosecutions, Keir Starmer, “so that I can be assured that this sort of mess will not happen again”.

Mr McKone told the court a lengthy trial involving the defendants from Leeds, Sheffield, Newcastle and other areas of the North, should have started yesterday but a decision had been taken it was no longer appropriate to continue with the case.

The police launched the investigation after a referral from the Driver and Vehicle Licensing Authority: “The Crown’s case is that the defendants had been involved buying vehicles to sell on at a profit without paying VAT.”

The more expensive the car, the more VAT was not paid by the disabled purchaser. For a Rolls Royce the difference was 48,000.

Mr McKone said since the last hearing in court permission had been sought from Revenue and Customs to amend the charge to one of evading VAT. The position involving two of the defendants was then disclosed, immunity given because they had entered into a “civil recovery agreement”.

He said it was not felt in law they could then be prosecuted for the same offence again.

The reasons for such a policy were complicated but one was because “the nature of this offending was so widespread the department concluded it was impossible to prosecute all those involved”.

After the case Matthew Elliott, Chief Executive of the TaxPayers’ Alliance said: “It is staggering that major Government agencies could be so bad at communicating with each other.

“This odd decision and the policy of keeping secret, have cost taxpayers a fortune that we cannot afford. It should be straightforward and stand practice for the CPS and the tax authorities to talk to each other about these important issues.

“If they had bothered to do so earlier on, we could have saved all of this waste.”

HMRC declined to comment.

Comment: Page 10.