County Durham VAT fraudster jailed for ‘international’ con

Joseph Rayner.
Joseph Rayner.
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A businessman who ran three international export companies from his County Durham home has been jailed after an investigation uncovered his £198,000 VAT fraud.

Joseph Rayner, of Hermitage Gardens, Chester-le-Street, supposedly supplied machinery to power stations in Gambia and Malaysia.

But in reality, he was hiding a six-year scam that was exposed when HM Revenue and Customs (HMRC) scrutinised the 61-year-old’s VAT repayment claims.

Rayner’s business, it emerged, was built on bogus invoices and counterfeit shipping papers that gave the illusion he had exported electrical goods outside the EU – where no VAT is charged.

Rayner then reclaimed the UK VAT he had originally ‘paid’ on equipment that never actually existed.

Diane Donnelly, criminal investigation, HMRC, said: “Joseph Rayner is now paying the price for his greed. He used taxpayers’ money to line his own pockets but, as a businessman, he should have known that HMRC is vigilant and will always pursue anyone suspected of being involved in criminality.

“Tax fraud is not a victimless crime – the money Rayner took from the taxpayer should have been spent on running the country’s public services. We will bring him back before the courts to recover what he has stolen.”

Rayner first appeared on HMRC’s radar in October 2011 after a routine check of his 2009/10 tax return revealed anomalies in his bank statements. He was given the opportunity to explain and resolve the issue, but failed to cooperate with HMRC.

Investigators then turned their attention to VAT repayment claims submitted between 2004 and 2010. They discovered that much of the supporting documentation had been fabricated, with invoices containing false signatures. Supposed shipments to Gambia and Malaysia, it transpired, never existed.

With a criminal investigation looming, Rayner ‘downgraded’ his £440,000 Chester-le-Street home to a more modest £235,000 property – on the same street.

But when his new home was searched following his arrest in August 2013, investigators found no trace of company records or any office equipment, including a computer, despite claims that his businesses were being run from home.

After giving two ‘no comment’ interviews following his arrest, Rayner pleaded guilty to being knowingly concerned in the fraudulent evasion of VAT with intent to deceive at Durham Crown Court on April 30, 2015.

He was sentenced to two years in prison by His Honour Judge Hickey yesterday.