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Chinese restaurant owner’s £1m tax fraud goes to pot

A Chinese restaurant owner, who stole more than £1m in tax by claiming his business “made pottery” and had a “tiny turnover”, has been jailed for three years.

Chin Seong Lam, 60, from Barnet, north London, owned outlets at the O2 Arena in North Greenwich and at Gun Wharf Quays shopping centre in Portsmouth, Hampshire. He failed to declare cash payments, fraudulently pocketing £1m in tax, an HM Revenue and Customs (HMRC) investigation uncovered.

Both businesses used a similar scam when they opened, in North Greenwich, the Water Margin restaurant registered for VAT in April 2013 and was described as “manufacturing pottery with an estimated yearly turnover of £10,000”. The actual annual turnover of the restaurant was £5.1m.

In Portsmouth, the Water Margin registered as an ‘Art Illustration Company’ with a turnover of £10,000 per year. HMRC found that between February 2013 and March 2016 the figure was in fact £5.3m. The restaurant went into liquidation in September 2016.

Lam declared just £2,100 in self assessment income between December 2014 and November 2016 despite being a director of both restaurants.

HMRC officers swooped on the North Greenwich eatery a month after a new company took it over in February 2017, and the owners had mirrored the behaviour of the other companies, in being listed at Companies House as being an “artistic creation” company. Lam was also planning to operate a new company from the sidelines, but it never traded.

Lam was arrested on 10 March 2017, with the North Greenwich outlet and his home searched that day.

Richard Wilkinson, assistant director at the Fraud Investigation Service of HMRC, said: “Lam made millions and paid very little tax, rubbing law-abiding taxpayers’ noses in it. The cash he pocketed was the equivalent to the starting salary of 130 new nurses in London for an entire year.

“We will continue to pursue criminals who think it is acceptable to charge their customers VAT and pocket the money for their own benefit. Anyone with information about tax fraud should report it to HMRC online or contact our Fraud Hotline on 0800 788 887.”

On 23 November 2018 at Harrow Crown Court, Lam admitted VAT fraud and money laundering and on 20 December 2018, was sentenced to three years in jail. Confiscation proceedings to recover assets will now begin.

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