Stay-at-home father dodged tax on £4.7million of electrical goods he sold on eBay

By Daily Mail Reporter

A stay-at-home father who dodged tax on £4.7million-worth of electrical goods he sold on eBay was jailed today.
Gregory Allnutt, who has a seven-year-old son, avoiding paying more than £420,000 in VAT.
He raked in £4,000 a month over three years selling cut price electrical goods on the internet.
The 40-year-old, from Croydon, set up a company called Shapewise to sell nutrition products from the comfort of his home.
But instead he bought tax-free electrical goods from the European Union through online site Pixmania before selling them on for a profit.
Instead of declaring the sales and adding on the price of VAT, he undercut his rivals and maximised his profits.
He continued to file 'nil' accounts between 2007 and 2010, falsely stating he had earned no money.
Allnutt, whose wife was paid £7,000 each month as well an extra allowance for school fees and a company car, spent the cash on a luxury car and two motorbikes.
He did not realise he was obliged to pay VAT on the goods he sold, the court was told.
But he was informed by his accountant at a meeting in 2007 that he owed £67,000. 

Instead of turning himself in, he continued with the scam until December 2010 when he was caught by inspectors from Her Majesty's Revenue and Customs.Prosecutor David Hewitt said: 'It wasn't until 2007 that he realised he wasn't paying it properly.
'At that point he was in too deep and he realised he was stuck. He realised if he charged VAT he wasn't able to compete.
'He did try it legitimately but he couldn't make the system work because he couldn't make enough money.'
The court also heard his VAT number was eventually automatically de-registered by HMRC after he failed to file any accounts.
But unperturbed, he re-registered and continued trading, later changing the company name to Specialist Electricals.
'It was a simple fraud in effect,' said Mr Hewitt. 'What had been discovered was that records showed that in fact over the period that the registration had been in place Pixmania had sold goods to this defendant of more than £4.7million.
'Therefore the total amount of VAT which he avoided was £420,000.'
Sentencing him to 20 months in prison, Judge Anthony Leonard QC said: 'Being aware of your obligations to pay VAT you carried out a thoroughly dishonest scheme to avoid paying VAT.
'You avoided £429,000 of VAT and because you were able to offer the goods at prices below those a trader paying VAT could you have prevented honest tax paying traders competing with you.
'You claim that you had become trapped into the scheme when you discovered that you owed £67,000 to the revenue.
'That should have led you to stop your trading altogether but you decided to carry on in full knowledge that you were doing what was wrong and that you owed money to the revenue.'
Allnutt admitted 12 counts of fraudulent evasion.