New Delhi: A Welsh man received tax bills amounting to £500,000 for 11,000 Chinese companies when they fraudulently used his Cardiff address to register for VAT, BBC reported. "It's been horrendous," said Dylan Davies who received letters from HM Revenue & Customs (HMRC) demanding the tax amount. According to the report, this started first in November last year when he found 580 brown envelopes when he went to check his post, and over the next six months, the tax bills kept coming.
"You'd think there'd be a systems with the technology today that would have picked it up immediately," he said. Davies also informed the police and HMRC but that did not help his cause.
According to Davies, he got more worried with the increasing amount as he feared that the bailiff might arrive and failing to pay the amount would lead to property being taken away.
The head of HMRC admitted the problem in a letter to the Commons public accounts committee. Permanent secretary Jim Harra said, "2,356 of the businesses have a tax debt and we have acted to prevent any further contact with this address in relation to these debts."
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He further said that investigations have "so far have found no evidence of fraud or fraudulent intent" and 70% of the businesses registered to Davies's address operated in online marketplaces.
"We are reviewing our operational processes for managing high volume address changes, including understanding any vulnerabilities in our systems associated with this behaviour,” he added.
As per financial crime consultant Graham Barrow, this is a case of fraudulent activity from the overseas companies.
“It looks to all intents and purposes like VAT fraud. There's no other reason why you'd register for VAT at a complete stranger's address, particularly for 11,000 companies to do that,” BBC quoted Barrow as saying.