The fraud was revealed during an investigation by HM Revenue and Customs (HMRC) into the family members:
· Bernard Knutsen, 68, who was jailed for four years;
· his wife Maureen, 62, was jailed for three years; and
· their daughter Kelly Ann, 38, was jailed for 21 months suspended for two years.
Sandra Smith, Assistant Director, HMRC Fraud Investigation Service said:
“This family thought they were exempt from the law. You cannot decide to ignore your tax obligations and not expect HMRC to take action. We are determined to maintain a level playing field for all local businesses and will not tolerate fraud like this.
“Tax evasion isn’t a victimless crime, tax fraud is theft from the public purse, it takes money out of public services that everyone in the UK relies upon. If you suspect fraud similar to this report it to the HMRC 24-hour Fraud hotline on 0800 788 887 or online via Gov.uk – search for ‘HMRC reporting fraud’.”
HMRC investigators found Bernard Knutsen ran the Hill Street garage – which was known at various times as Able Testing, Hillside Services and The Service Station – and failed to pay any VAT, Income Tax or National Insurance. He did the same with Chaplin’s Bar, which he ran with the help of his wife Maureen. The pair failed to declare their income from the businesses when claiming various benefits.
Their daughter Kelly Ann received unexplained money from both businesses into her bank account. She also claimed benefit to cover her rent but failed to declare a second property she owned and rented out.
Family friend Gary Hyland, 49, was also involved in the fraud and was given a two-year community work order with 12 months supervision and a three month curfew for benefit fraud on 8 May 2017 at Liverpool Crown Court. He did not declare his rental income to HMRC and the Department of Works and Pensions (DWP).
Hyland lied about his involvement in Chaplin’s Bar to secure a £13,000 loan to buy a caravan. He admitted being a front for the business and had no financial involvement in it. He also failed to declare he was renting out a property he claimed to live at for his benefit claim.
The investigation by HMRC and the DWP found other individuals claiming benefits without declaring income received while working for or with the Knutsens. These individuals were investigated separately by DWP.
A DWP spokesman said:
"Only a small minority of benefit claimants are dishonest, but cases like this show how we are rooting out the unscrupulous minority who are cheating the system and diverting taxpayers’ money from those who really need it.”
The Knutsens were sentenced on 1 December at Liverpool Crown Court, confiscation proceedings have begun to recover the stolen tax.