Case details for Christopher Jonathan MARREN

Name: Christopher Jonathan MARREN

Name: W.H.Marren Limited

Date of Birth: 6 / 6 / 1961

Date Order Starts: 24 / 4 / 2020

Disqualification Length: 12 Years 0 Month(s)

CRO Number: 00752022

Last Known Address: Marston Gables, Marston,, , Church Eaton,, , STAFFORD,, ST20 0AS

Conduct: 1. Between 05 March 2014 and 04 September 2014, Christopher Jonathan Marren (“CJM”) caused or allowed W.H. Marren Limited (“WHM”) to participate in transactions which were connected with the fraudulent evasion of VAT, such connections being something which he either knew or should have known about. Christopher Jonathan Marren (“CJM”) was aware that Missing Trader VAT fraud was rife in the sector WHM traded in or, ought to have been aware of it because prior to and during the period in which the transactions under consideration took place: • A letter dated 04 November 2011 was sent by HMRC to WHM which enclosed a “How to Spot Missing Trader Fraud” leaflet. • On 21 November 2012, WHM received a visit from HMRC officers where due diligence was discussed, and advice was given concerning the verification process of other traders’ VAT registration numbers. • A Missing Trader Awareness letter dated 26 November 2012 was issued to WHM. • On 24 June 2013 HMRC officers visited WHM and verification of VAT registration numbers and due diligence was discussed. • An “MTIC Awareness and Verification” letter dated 12 December 2013 was issued to WHM by HMRC. • On 16 December 2013, HMRC officers visited WHM and Missing Trader VAT fraud was discussed. CJM confirmed that he had some awareness of Missing Trader VAT fraud. HMRC officers explained the importance of due diligence checks and issued a “How to Spot Missing Trader Fraud” leaflet and Notice 726 “Joint and Several Liability.” WHM was informed during the visit that it was to be placed onto the monitoring project, whereby HMRC would collect WHM’s VAT records on a monthly basis in order to verify the deals and VAT return. This was because there were suspicions there were tax losses in WHM’s transaction chains. HMRC informed WHM that should they establish tax losses within the deal chain WHM may lose its right to reclaim the VAT. CJM was handed the monitoring introduction letter dated 12 December 2013. • Five tax loss letters dated from 27 January 2014 to 04 September 2014 were issued to WHM by HMRC, in relation to 34 purchases from its UK supplier with total VAT losses amounting to £2,621,358. • On 24 March 2014, HMRC officers visited WHM and the tax losses notified to WHM in HMRC’s letter dated 27 January 2014 were discussed. WHM was also informed that there were suspected further tax losses that may have been identified in earlier periods. A presentation about Missing Trader VAT fraud was given. WHM was advised that if HMRC found tax losses within the supply chain WHM could be held liable for the unpaid VAT. CJM was present at this meeting. • A letter dated 25 April 2014 was sent to WHM by its solicitor, in which the solicitor advised that, as HMRC had notified the company that 4 purchases from its supplier were connected to fraud, WHM may be liable for the tax loss on a joint and several basis. The solicitor advised that the question to be addressed was whether a reasonable business man would have known that the relevant transactions were connected to fraud. • On 13 May 2014, HMRC officers visited WHM and the verification of the VAT return for period ending 31 March 2014 was discussed. HMRC advised CJM that the Tax Loss letters issued were a warning to him to consider changing his business practices. HMRC informed CJM that WHM had been involved in deal chains where HMRC had suffered tax losses and that WHM continues to undertake transactions that HMRC suspect may be a risk to HMRC. WHM advised HMRC that since receiving the tax loss letters they had sought legal advice and had met with a representative of the UK supplier at WHM’s office. The trading in which WHM was involved had features which put, or should have put, CJM on enquiry about the legitimacy thereof, as follows: • WHM was advised by HMRC of tax losses involving its UK supplier on 27 January 2014, 01 April 2014, 12 May 2014, 24 June 2014 and 04 September 2014. On each occasion the letters stated that WHM should ensure that it has undertaken sufficient due diligence to satisfy itself as to the integrity of its suppliers and customers, and of the underlying supply chains. • The product in each case is purchased and sold through several UK companies before reaching an end-user. None of those companies adds any commercial value to the product or process. • The transactions were undertaken on a back to back basis. WHM was able to source goods within a very short space of time, with all such purchases and onward sale being completed on the same day, or within a very short period of time. • The product was delivered by WHM’s supplier directly to its customer without WHM taking delivery of or seeing the product. WHM did not inspect or weigh the goods. • The only company within the UK supply chain who took physical delivery, inspected and weighed the goods was WHM’s customer. • Throughout the chain the description and weight of the goods differ. • No member of the supply chain was required to pay its supplier until it itself was paid. • The contracts entered into by WHM with its suppliers and customers did not include a returns or exchange policy or any agreement regarding transfer of title. The absence of any such terms is indicative that this was not normal commercial trade. Despite being aware of Missing Trader VAT fraud and engaging in transactions bearing the features of such fraud, CJM failed to ensure that WHM carried out effective steps, checks and/or due diligence in respect of its trade and of its trading partners as follows: • WHM was advised by HMRC to undertake due diligence prior to undertaking transactions to establish the credibility and legitimacy of its customers, suppliers and supplies. • WHM was warned by HMRC in a letter dated 27 January 2014 that four of its purchases from its UK supplier of copper cathode were part of a deal chain that commenced with a defaulting trader. WHM continued to purchase copper cathode from the same supplier until 04 September 2014. • Having been notified of tax losses within its supply chain, WHM obtained identification documents from the directors of its supplier and conducted a credit search on its supplier. The credit report stated that the supplier was a high credit risk. • WHM met with its supplier on 10 April 2014 and the supplier advised that it had changed its own supplier and that due diligence had been conducted on the new supplier. WHM’s supplier would not disclose the name of its new supplier or copies of its due diligence. WHM continued to trade with that supplier. • In a letter dated 25 April 2014, WHM was informed by its solicitor that HMRC considered that the transactions with its supplier were connected to fraud and that WHM may be liable for the resulting tax loss on a joint and several basis. The solicitor advised WHM that “it is essential that you are able to satisfy yourself of the integrity of your supply chain and the suppliers, customers and goods within it…It is essential that you not only carry out that due diligence by that you take appropriate action based upon the results of the enquiries that you make.” • WHM’s solicitor also notified the company that WHM’s former supplier had gone into liquidation, as a result of unpaid VAT in the sum of £20 million. The director of that company was WHM’s main contact at its current UK supplier and WHM has stated that it traded with its supplier based on its long-standing trading relationship with the director of its former supplier. WHM was advised by its solicitor that the director had been asked whether he had been disqualified as a director in relation to his conduct as a director of the former supplier and the director had stated “not yet.” That director was later disqualified with effect from 12 June 2014 for a period of 13 years. This information would have been available to WHM by doing an internet search from 24 July 2014 at the latest. • On 20 May 2014, WHM engaged a due diligence specialist to conduct additional due diligence on its UK suppliers and the specialist produced a report to WHM on the supplier dated 09 June 2014. The additional due diligence conducted by the specialist included HMRC validation letters, VAT registration certificates, identification documents for the directors, stationery, copies of bills, photos of premises. Positive references were obtained from the supplier’s landlord and accountant. • HMRC’s claim in respect of denied input tax includes £3,662,508 which relates to purchases between March and May 2014 from the UK supplier, which was after WHM had been notified that previous purchases from the same supplier were in a chain commencing with a defaulting trader and before WHM received the additional due diligence from the specialist. This shows that the additional due diligence from the specialist did not influence WHM’s decision to continue to trade with its supplier after it had been notified of issues in the supply chain. • The additional due diligence obtained by WHM did not address HMRC’s concerns over its supply chain or the issues raised by WHM’s solicitor. In view of the Missing Trader hallmarks and failure to take adequate steps to reduce risks of involvement with Missing Trader VAT fraud, HMRC denied WHM’s right to claim input VAT of £7,646,363 in relation to the VAT periods 03/14 to 09/14. 

This information is correct as at 12 / 5 / 2020

If you believe this page contains any errors, please email with details of the error that you have found.