Glasgow restaurant owners carried out VAT fraud of nearly £700k

Two leading Glasgow restaurateurs and their accountant have admitted involvement in a large scale VAT fraud.

Antonio Carbajosa, 41, Kevin Campbell, 44, and Khalid Javid, 67, were arrested after a HMRC probe.

Carbajosa and Campbell ran a group of venues in Glasgow that included Cranside Kitchen, Pickled Ginger and Halloumi.

The duo pled guilty to fraudulent evasion of VAT totalling £682,882 between November 2011 and October 2016 and were sentenced to three years each for their crimes.

Javid also admitted recklessly making a statement which was false by submitting VAT returns for two companies.

Details of the case could not be reported until Javid's case has been resolved. He had been due to stand trial before also pleading guilty.

The court heard Carbajosa and Campbell were associates who ran a number of restaurants and takeaways across Glasgow.

The firms between them included Cyprus Leisure, Rotunda Leisure, Lookoil, Catering 58, Beachfront, Seaside 41, South Promenade and La Reguera.

It was stated that the pair "acted together in a co-ordinated way", suppressing the true value of sales for their limited companies.

The accountant's KA Javid & Co were instructed by Carbajosa and Campbell, creating the firms' VAT returns and dealt with other matters such as PAYE, corporation tax and annual returns to Companies House.

Prosecuting, Wojciech Jajdelski told the court Carbajosa and Campbell had been able to profit in the long term by not accounting for all of the VAT due to HMRC.

"The companies were able to finance their commercial activities, including payments of staff wages, out of the sales income part of which ought to have been accounted for HMRC," he said.

Despite some of the businesses selling sushi takeaway food that required no VAT, most of the supplies were in fact subject to 20% tax.

HMRC investigators noticed initial discrepancies in returns from two of the businesses.

A forensic accounting report was prepared between August 2012 and October 2016, which stated the fraudulent evasion of tax by the two men amounted to £682,882.

Jajdelski said all the relevant companies had an annual VAT turnover which was "significantly" in excess of that year's registration limits. Three of the companies were not registered for VAT and did not pay tax on sales generated.

He said HMRC made a total loss of £136,576 from Javid's actions.

"In relation to two of the companies, Mr Javid recklessly made statements in the relevant VAT returns which were false," he said.

This included failing to give the correct sales and output VAT. It was also said a 20% reduction to all sales figures without a "proper factual basis" was carried out.

Sentence was deferred on Javid pending background reports until next month at the High Court in Glasgow. He was granted bail by the judge, Lord Young.