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April's round up of the latest tax investigation news and cases:
The number of high income child benefit charge (HICBC) penalties have dropped dramatically from over 13,000 in 2018/19 to 46 in 2024/25.
HMRC's enforcement of the high income child benefit charge has seen a significant decline in recent years, according to figures revealed in a freedom of information request from Quilter to HMRC.
The data shows a dramatic reduction in both the number of penalties issued and the total amount collected, with penalties dropping from 13,527 in 2018/19 to just 46 in 2024/25, and revenue falling from nearly £7 million to only £23,326.
For years, the HICBC has been criticised for perceived inequities in its application. Critics argue it is unfair that two parents both earning just below the cap will not be subject to the charge, while a single parent earning over the cap, or a couple where one earns over the threshold and the other may not even be working, are penalised.
Holly Tomlinson, financial planner at Quilter, said: "The collapse in these penalties is no accident — it reflects the pressure that has rightly built up over years about how unfair the system was. Huge media attention highlighted the absurdity of a single parent losing all their child benefit while a couple each earning just under the threshold could keep the lot. The government has finally accepted this doesn't pass the fairness test and is now using carrot rather than stick to help people keep to the rules.
"In the meantime, families still need to tread carefully."
The threshold for the HICBC increased from £50,000 to £60,000 in 2024, and HMRC is also working to allow the charge to be collected directly through a parent's PAYE scheme. However, this change is not expected to be implemented until summer 2025.
Before Labour won the election in July 2024, the Conservative Party had planned to reform the system to consider a household's combined income rather than just one high earner's. Labour has since paused this reform, citing implementation costs. The government estimated it would cost £1.4 billion by 2029/30 if it doubled the tapered threshold from £60,000-£80,000 to £120,000-£160,000.
Tomlinson advises families affected by the HICBC to consider their options carefully: "If you opt out of receiving child benefit to avoid the charge, make sure the parent who is not working or earning less still gets their National Insurance credits, which count towards the state pension. And for those hovering near the income threshold, salary sacrifice into a pension can be a wise financial planning tactic — it reduces your adjusted net income and can bring you back below the charge entirely.
"While Labour look set to let the clear inequalities remain baked into the system at least they are making it easier for people to pay back any additional child benefit they are not eligible for."
TV presenter Holly Willoughby did not turn up at the High Court for a hearing on whether to wind up her jointly owned Roxy Media over unpaid tax bills.
Roxy Media, the company jointly owned by former This Morning presenter Holly Willoughby and her husband Dan Baldwin, has settled a tax bill of £377,000 following a winding up petition from HMRC, the High Court heard on 16 April.
Despite the settlement of the principal amount, the court was informed that there is still some outstanding tax due to HMRC, though the exact amount remains undisclosed. The High Court case has been adjourned for 12 weeks and will reconvene on 12 July 2025.
According to Roxy Media's latest accounts filed at Companies House on 29 May 2024 for the year ending 29 August 2023, the company owed £329,715 in corporation tax, an increase from £230,000 in 2022. The accounts also showed an outstanding VAT liability of £16,577 for the 2023 year.
The financial statements revealed a significant reduction in the company's cash reserves, with cash at bank falling from £973,645 in 2022 to £82,279 in 2023. Current total debtors were reported at £534,807.
HMRC had previously commented on its approach to such cases: "We take a supportive approach to dealing with customers who have tax debts and only file winding-up petitions once we've exhausted all other options, in order to protect taxpayers' money."
Willoughby herself was not present at the High Court hearing.
A fraudster who claimed to be the area manager for 32 Greggs bakeries to claim Covid support funds designated for small business support has been jailed for four years.
Aftab Baig, 47, has been sentenced to four years in prison after defrauding Leeds City Council out of more than £710,000 by falsely claiming to be a Greggs area manager during the Covid-19 pandemic.
Baig, from Glasgow, was found guilty at Leeds Crown Court on 12 February following a six-day trial for abusing pandemic support schemes. His sentencing took place on 15 April, with proceedings now set to begin to recover the outstanding £90,000 of the fraudulently obtained funds.
The fraudulent activity began in May 2020 but lasted only until July of the same year before Leeds City Council detected the deception. Despite this relatively short timeframe, Baig managed to obtain substantial funds by falsely claiming to manage 32 Greggs bakeries, though he was never employed by the company.
Baig was arrested at his home address in Glasgow in 2020, where police discovered £16,000 in cash along with forged remittance slips. Investigators believe these documents were intended to convince banks to release frozen funds from his accounts.
Kelly Ward from the Crown Prosecution Service said: "Baig took advantage of the difficult circumstances of the pandemic in 2020 to defraud the council out of taxpayers' money.
"Those who cheat the public purse are stealing funds which should rightly go towards services and the community, or in this case towards supporting small businesses through an extremely challenging time.
"We will not hesitate to work together with investigators such as NATIS to bring offenders like Baig to justice. We will also be starting proceedings to recover any assets resulting from this criminality."
Kenneth Scott FCA, 69, managing partner of Willis Scott Group based in Durham, has been sentenced to four years in prison after orchestrating a £1.7m tax fraud scheme. The ICAEW accountant, who ran a practice with over 50 staff, was found guilty of siphoning VAT charged to clients into his personal funds and stealing National Insurance and tax deductions from his employees' pay packets.
Between 2014 and 2021, Scott systematically deducted the correct National Insurance contributions (NICs) and income tax from his staff's wages, giving employees no reason to suspect wrongdoing, but then kept the money for himself rather than remitting it to HMRC.
HMRC investigators believe the fraud may have begun as early as 2007, potentially pushing the total stolen above £2m, though Scott was only charged for offenses dating from 2014. The fraudulent behavior has created gaps in the tax histories of his former employees, which could impact their future state pension entitlements.
Scott used the misappropriated funds to finance an extravagant lifestyle, including £30,000 luxury holidays and the purchase of an Aston Martin for £73,000.
The scheme came to light when employees began receiving letters from HMRC notifying them of gaps in their tax records. Following an investigation, Scott was arrested at his home in April 2021.
On 15 February 2024, Scott admitted to two counts of cheating the public revenue at Newcastle Crown Court. He was sentenced on 4 April 2025 to four years' imprisonment and received a 10-year ban from acting as a company director.
While some funds have been recovered through the sale of Scott's residential properties, over £1m remains outstanding. The accountancy practice is due to be sold, with the proceeds going to HMRC.
The Willis Scott Group is an ICAEW member firm with offices across the North East, including South Shields, Bishop Auckland, Hexham, Sunderland, and Benton. Scott himself has been an ICAEW member since 1978 and holds the FCA designation.
Gary Darrington, operational lead at HMRC, commented on the case: "As an accountant Kenneth Scott should have known better than to try and cheat the system. He stole from the taxpayer and damaged the tax records of his employees, which we have been working hard to correct.
"Accountants hold a position of enormous trust, and this sentence should serve as a warning to the minority of corrupt professionals who wrongly believe they can use their knowledge to commit or facilitate tax crime."
An ICAEW spokesperson responded: "Our disciplinary byelaws preclude us from commenting on whether any matter may or may not be the subject of consideration by our professional conduct department. Where such consideration results in disciplinary action being taken then a public announcement will be made."
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