The son of a man who has been involved in a series of legal battles with HMRC over his role as a tax agent for a roll call of TV stars and celebrities has himself been convicted of six offences under the Fraud Act, following an investigation by HMRC
The latest case at Southwark Crown Court concerned Christopher Lunn, described as a former soldier turned tax agent who, HMRC said, lied to cover up incorrect returns submitted for clients.
Lunn worked for the firm Christopher Lunn & Company (CLAC) which was run by his father, also called Christopher Lunn.
In 2011 HMRC removed agent status from the business, which counted a number of high profile TV and entertainment stars among its clients, over concerns about irregularities in accounts and returns.
The court heard evidence that the younger Christopher Lunn sent false invoices to HMRC to cover up an increase in the amount charged for accountancy fees on behalf of his employers’ clients.
Clients were given one low-cost bill for accountancy services (which are tax deductible), but these bills were increased when their accounts were submitted to HMRC.
HMRC said that this meant that the firms’ clients paid less tax than they owed, as their fees were inflated to such an extent – sometimes by thousands of pounds – that the tax benefit was equal to the true cost of the accountancy service.
Lunn, who was not a trained accountant, was also convicted of lying to HMRC about a client’s source of income. He claimed that she had earned her income through a limited company, rather than as a sole trader, in order to take advantage of a lower tax rate for businesses.
He has been convicted of six counts of mis-representation under the Fraud Act and sentenced to nine-months imprisonment on each count which was suspended for 12 months. He was also ordered to carry out 250 hours of unpaid work.
The judge in the case described Lunn as ‘shameless’ and said that the jury’s verdicts had showed he engaged in shameless and bare-faced dishonesty by lying to HMRC.
Jen Becker, assistant director, criminal investigation, HMRC said: ‘Lunn admitted in court that the invoices were false but denied that he had lied to HMRC officers during the enquiries. The jury did not accept this.
'The overwhelming majority of tax agents are honest and HMRC relies on them to ensure their clients pay what they owe.'
In March this year a jury failed to return verdicts on four counts of cheating the public revenue in a trial involving Christopher Lunn senior, CLAC’s founder. The accountant, who is based in East Susssex, was found not guilty of two further counts of tax fraud. The Crown Prosecution Service has announced its intention to pursue a retrial in September 2015.
