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December's round up of the latest tax investigation news and cases:
Robert Kemp, 56, a fugitive wanted for VAT fraud, was tracked down by HMRC investigators in Wales after he purchased an £18 kebab. His actions ultimately led to his arrest and a sentence of three years and four months in prison.
Kemp had been evading authorities since 2021, failing to appear at court hearings concerning fraudulent activities tied to a window company he co-directed with his son, Marcus. The pair had submitted false invoices between May and November 2015, fraudulently claiming £251,499 in VAT refunds.
Marcus Kemp was sentenced to two years and two months in prison in September 2021. However, Robert Kemp managed to elude capture until April 2024, when his kebab purchase near a bedsit where he was hiding half a mile from the restaurant provided investigators with crucial clues to his location. He was arrested on April 11, 2024.
Mathew Moignard, assistant director of the Fraud Investigation Service at HMRC, commented: “This case shows that we don’t forget, and we don’t give up. We can and do use a range of tools to track down fugitives and bring them back before the courts to face justice. Tax fraud is not a victimless crime. The tax we all pay helps to fund the public services we rely on. The majority pay the tax that is due, but a determined minority who refuse to play by the rules.”
Following his arrest, Kemp appeared at Swindon Crown Court, where he was sentenced to two years for VAT fraud, an additional year for an affray offense, and two more months for evading capture.
Moignard reiterated HMRC’s commitment to tackling fraud: “We are determined to create a level playing field for all and we encourage anyone with information about tax fraud or money laundering to report it online.”
Funnyfuzzy UK Co, Ltd, an online pet supply company based in South Croydon, has been shut down following a High Court ruling in London. The closure came after an investigation by the Insolvency Service revealed significant financial irregularities, including the processing of over £2.58 million through the company’s PayPal account despite it filing dormant accounts. The company, which sourced its products from China, had been operating since April 2021.
Hang Chen, 58, was the sole director of the company from July 2021, three months after its formation. He is listed as a person with significant control on Companies House, with a registered correspondence address in South Croydon. The other beneficial owner is Funnyfuzzy US Co Ltd, a company based in Albany, New York. Investigations revealed that Funnyfuzzy UK shipped all its products, including dog beds and sofa covers, from China, and primarily sold these items online through platforms such as PayPal, Shopify, Amazon, and Stripe.
Despite evidence of significant trading activity, the company filed false dormant accounts for 2022 and 2023 and failed to register for VAT. According to the Insolvency Service, Funnyfuzzy not only misled authorities about its financial activity but also failed to meet customer expectations, often delivering substandard products or, in some cases, not sending ordered items at all. Complaints from numerous customers highlighted issues such as defective goods and unfulfilled orders, with Trustpilot reviews reflecting these problems—approximately two-thirds of reviewers awarded the company just one star for its service.
Cheryl Lambert, chief investigator at the Insolvency Service, criticized the company’s conduct, stating: “Funnyfuzzy failed to adequately co-operate with our investigations, offering no explanation for online complaints from numerous customers that it had sold them low-quality or defective goods. The company also disguised its real trading by filing dormant accounts, putting itself at an advantage over businesses following the rules and paying the tax required of them.”
Investigations into Funnyfuzzy began in December 2023 and uncovered evidence directly contradicting the company’s claims that it was merely a UK-based extension of its US counterpart, FF US. Records showed that Funnyfuzzy UK had been actively managing financial accounts since May 2021, just one month after its incorporation, and was directly conducting business through PayPal, Shopify, Amazon, and other payment processors. Additionally, claims that the company operated a warehouse in Leicester could not be substantiated.
The company’s actions led to significant scrutiny from regulators. Cheryl Lambert further emphasized the importance of transparency in UK businesses, stating: “Companies registered in the UK are expected to file accurate accounts and trade in a manner which is transparent. Funnyfuzzy failed on both counts to do this, which is why it has now been shut down and prevented from trading in the future.”
The case also drew comment from Martin Swain, director of intelligence and law enforcement liaison at Companies House, who highlighted the broader implications of the investigation. “Improving transparency over UK companies and delivering a more reliable register on Companies House to underpin business activity is a key priority. As this case demonstrates, the government is committed to taking action against companies responsible for filing false accounts and misleading the public. Enforcement action such as this by our partners at the Insolvency Service will help us improve the accuracy of the information on the register and protect innocent people from scams.”
The ruling to wind up Funnyfuzzy UK Co, Ltd marks a decisive step in addressing the misuse of UK business registrations to mislead authorities and the public, while also underscoring the government’s commitment to holding companies accountable for fraudulent behavior.
Samantha Fairweather, 53, the sole director of Essex-based Fairweather Construction Ltd, has been banned from serving as a company director for eight years after an investigation revealed significant financial misconduct. The company, which specialized in home improvement projects such as windows and conservatories, collapsed in September 2022, leaving behind unpaid taxes and a trail of unfinished work despite collecting substantial deposits from customers.
Fairweather Construction, established in 2014, ran into severe financial trouble by April 2022. At that time, Fairweather sought advice from an insolvency practitioner. By then, the company was holding over £150,000 in customer deposits for incomplete projects, including home extensions, window installations, and conservatories. Despite this precarious financial position, the company continued accepting deposits for new projects. Between April and September 2022, it collected an additional £177,900, including £37,370 in deposits for new work it had no realistic prospect of completing.
When the company folded later that year, it owed over £100,000 in unpaid taxes and accumulated total liabilities exceeding £700,000. The collapse prompted an investigation by the Insolvency Service, which revealed a series of financial missteps and customer betrayals. Among these, Fairweather was found to have misused £11,000 of a £50,000 Covid Bounce Back Loan, repaying herself instead of addressing the company’s financial obligations.
Neil North, chief investigator at the Insolvency Service, condemned Fairweather’s actions, stating: “Samantha Fairweather knew, or ought to have known, that the company she was a director of had unpaid debts to HMRC and had been unable to fulfil its obligations to existing customers. The company then took significant amounts of money from homeowners for house extensions and projects which were never done. Members of the public need protection from this kind of activity, which is why Fairweather will no longer be able to act as a company director until October 2032.”
The company’s mismanagement impacted customers across the Essex and Hertfordshire border, as well as others further afield. A couple in south London paid £12,500 in July 2022 for new windows, but the order was never placed with the manufacturer. In Saffron Walden, a woman paid £4,500 in August 2022 for windows that were never installed. That same month, customers in Bishop’s Stortford were left £18,000 out of pocket for an unbuilt conservatory and incomplete extensions.
Homeowners reported that Fairweather Construction provided numerous excuses for the unfulfilled work, prolonging delays without resolution. These deceptive practices persisted even as the company’s financial stability deteriorated. When the firm was finally liquidated in September 2022, investigators determined that Fairweather’s actions violated not only her fiduciary duties but also public trust.
The company marketed itself as a home improvement specialist, catering primarily to properties near the Essex and Hertfordshire border. However, its registered office address was listed in Heskin, Lancashire—over 150 miles away from its operational area. Customers from diverse locations fell victim to its failure to deliver services, further highlighting the scale of the misconduct.
As a result of her actions, Fairweather is now banned from participating in the promotion, formation, or management of a company without court permission until October 2032. This case underscores the importance of financial transparency and ethical practices in business operations, particularly for firms entrusted with large sums of customer money.
The Insolvency Service’s findings and the director’s ban serve as a warning to others in the industry about the consequences of financial mismanagement and deceit. The government continues to emphasize the need to protect consumers and enforce stricter regulations to hold directors accountable for their conduct.
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