Name: PAUL PEARCE

Name: PPX METAL MANAGEMENT LTD

Date of Birth: 5 / 5 / 1983

Date Order Starts: 15 / 12 / 2025

Disqualification Length: 10 Years 0 Month(s)

CRO Number: 07774574

Last Known Address: Waterside, York Road,, , Haxby,, , YORK,, YO32 3EW

Conduct: Mr Paul Michael Pearce (“Mr Pearce”) caused or allowed PPX Metal Management Limited (“PPX”) to participate in transactions, which were conducted in the 11/14, 02/15, 05/15, 08/15 and 11/15 VAT periods, and were connected with the fraudulent evasion of VAT, such connections being something which Mr Pearce either knew or should have known about. From 01 September 2014 to 26 November 2015, Mr Pearce caused or allowed PPX wrongfully to claim input VAT of £3,710,349 from HMRC in relation to its 11/14 to 11/15 VAT periods. Annex 1.1 Mr Pearce was aware of the fact that MTIC VAT fraud was rife in the recovery and sale of metals, or ought to have been aware of it because: 1.1.1 PPX had been warned of it by way of a visit from HMRC officers dated 26 January 2012, during which HMRC gave an overview of MTIC fraud and provided Mr Pearce with the leaflet “How to Spot Missing Trader Fraud” and a copy of the HMRC Notice 726. 1.1.1 PPX had been further warned of MTIC Fraud by way of a letter from HMRC dated 01 February 2013 which set out the scale of the losses to the treasury caused by MTIC Fraud and also instructions on how to verify traders VAT numbers with HMRC’s Wigan office. 1.1.2 PPX stated that that they had attempted to verify the VAT status of a supplier with HMRC Redhill prior to 26 December 2012 at the meeting with HMRC on that date. 1.1.3 PPX were visited by HMRC on 25 November 2013 where Mr Pearce stated he had used HMRC’s Wigan office to check on suppliers. HMRC officers explained MTIC fraud, the purpose of the Wigan checks and encouraged PPX to do as many checks on suppliers as it could. HMRC officers gave Mr Pearce leaflets including “How to Spot Missing Trader Fraud” and Notice 726. 1.1.4 PPX were visited by HMRC on 09 July 2014 where Mr Pearce stated he had continued using HMRC’s Wigan office to check on suppliers. HMRC officers explained MTIC fraud, the importance of due diligence and encouraged PPX to do as many checks on suppliers as it could. HMRC officers gave Mr Pearce leaflets including “How to Spot Missing Trader Fraud” and Notice 726. 1.1.5 Between 13 July 2012 and 06 August 2014 PPX received Notices of Deregistration for VAT for 8 companies in the metal trade. 1.1.6 During a visit to PPX by HMRC on 06 November 2014 HMRC gave Mr Pearce a tax loss letter regarding one of PPX’s customers. HMRC informed Mr Pearce that PPX would be monitored by HMRC due to its involvement in tax loss chains of traders. PPX had made third party payments to two suppliers. HMRC discussed these and checks PPX could do to mitigate trading in goods with Companies traced to tax losses, as laid out in Notice 726. 1.1.7 Between the visit by HMRC on 06 November 2014 and 22 October 2015, there were at least 3 further visits by HMRC, 4 letters regarding tax losses in PPX’s supply chains and 14 letters notifying PPX of companies PPX traded with being deregistered by HMRC. 1.1.8 In Mr Pearce’s written evidence in respect of PPX’s VAT appeal, he accepted that he was aware that there was an element of fraud in PPX’s trade sector. 1.1.9 PPX’s VAT appeal concluded that PPX had been repeatedly given comprehensive advice as to the steps that could be taken to reduce the risk of entering into transactions connected to defaulting traders before the beginning of the relevant VAT periods and that the steps taken by PPX were not sufficient to prevent such transactions. 1.1.10 PPX’s VAT appeal was heard by the First Tier Tax Tribunal, which concluded that PPX, knew, or should have known, that its wholesale broker transactions conducted in its 11/14 to 11/15 VAT period were connected to MTIC VAT fraud. 1.2 The trading in which PPX was involved had features which put, or should have put, Mr Pearce on enquiry about the legitimacy thereof, as follows: 1.2.1 PPX was able generate a very high turnover as a result of its wholesale transactions, with its 11/14 to 11/15 VAT returns declaring net sales in excess of £25,376,863. 1.2.2 PPX conducted its wholesale broker transactions on a back to back basis, being able to source goods and complete purchases and onward sale on the same day. 1.2.3 PPX was able to buy and sell exactly the same quantities of goods in a short time scale. 1.2.4 PPX achieved a larger mark up when compared to its supplier for exactly the same goods. 1.2.5 PPX dealt directly with the defaulting companies with no or minimal due diligence checks and there were no buffer traders in its supply chains. 1.3 Despite being aware of VAT fraud in PPX’s trade sector and engaging in transactions bearing the features of such fraud, Mr Pearce failed to ensure that PPX carried out effective steps, checks and/or due diligence in respect of its trade and of its trading partners as follows: 1.3.1 Due diligence documentation in respect of the commercial checks made by PPX upon its trading partners was produced to HMRC, but this documentation only served to show that those trading partners actually existed at that time. The documentation should not have provided PPX with adequate assurance that its transactions were not connected to the fraudulent evasion of VAT. 1.3.2 Few independent checks suggested by HMRC guidance, such as credit checks, checks with Companies House, checks on addresses, were undertaken on any of PPX’s trading partners to establish their financial status. 1.3.3 PPX never entered into any formal contracts with its supplier and customers. 1.3.4 Checks on traders VAT status were often carried out after transactions had already been made. 1.3.5 PPX did not ensure that checks were always made with HMRC’s Wigan office and did not always cease to trade with defaulting suppliers when HMRC were unable to verify a supplier at the time the trading was being carried out. 1.3.6 PPX did not change its approach to due diligence throughout the relevant VAT periods despite receiving visits from HMRC officers and letters regarding tax losses and defaulting traders. 1.4 In the transaction chains involving PPX, there has been a fraudulent evasion of VAT causing significant tax losses to HMRC. In its 11/14 to 11/15 VAT periods, PPX conducted a total of 659 wholesale transactions, where HMRC has traced back through those transaction chains, and identified that 1.4.1 659 of the transaction chains were traced directly back to 11 defaulting traders that had incurred tax losses in those transaction chains of at least, £3,710,349. 1.5 In view of the evident features typical of MTIC trading and the failure to take adequate steps to reduce the risk of PPX’s wholesale broker transactions being tainted by MTIC VAT fraud, PPX was not then entitled to claim the input tax in respect of those transactions and consequently the input tax claim of £3,710,349 made in the VAT Returns for the 11/14 to 11/15 periods was wrongful. 

This information is correct as at 25 / 11 / 2025

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