Name: Kuldip Kaur Bachra

Name: OWD Limited

Date of Birth: 16 / 9 / 1959

Date Order Starts: 13 / 3 / 2024

Disqualification Length: 7 Years 0 Month(s)

CRO Number: 08533293

Last Known Address: 14 Spareleaze Hill, Loughton, , , Essex, IG10 1BT

Conduct: Between 01 January 2014 and 31 December 2016 at the earliest Kuldip Kaur Bachra (“Mrs Bachra”) caused OWD Limited (“OWD”) to participate in transactions which were connected with the fraudulent evasion of VAT, such connections being something which Mrs Bachra should have known about, and/or caused or allowed OWD to fail to carry out sufficient due diligence checks in relation to suppliers as suggested during contact with H M Revenue & Customs. Annex Mrs Bachra should have been aware of Missing Trader Intra Community (“MTIC”) VAT fraud because prior to and during the transactions under consideration taking place OWD Limited: • Received a visit from officers of HMRC on 23 October 2013 at which MTIC fraud was explained to and discussed with Mrs Bachra by the HMRC officers. A copy of HMRC Notice 726 which explains how a trader may avoid becoming involved in MTIC fraud, and a leaflet regarding MTIC fraud were given to Mrs Bachra by the HMRC officers. The HMRC officers’ notes of the meeting state that an HMRC officer took Mrs Bachra through notice “how to spot missing trader fraud” and placed particular emphasis on new companies, contacts with poor knowledge of the market and payments to third parties. • Received a visit from officers of HMRC on 27 March 2014 at which there was a discussion regarding the nature of OWD’s business, due diligence checks and unsolicited offers of stock. • Received a letter from HMRC dated 28 March 2014 containing advice on the risks associated with MTIC fraud and procedures for validating VAT registration details of trading partners. • Received a letter from HMRC dated 09 January 2015 advising that the VAT registration of one of OWD’s trading partners had been cancelled. • Received a letter from HMRC dated 30 June 2015 regarding OWD’s VAT return for 03/15. The letter notified OWD that as a result of its enquiries, HMRC had established that transactions involving OWD (where the whole chain had been established) commenced with a defaulting trader, resulting in losses to the public revenue in excess of £51,324. HMRC’s letter stated that OWD should satisfy itself that it had undertaken sufficient due diligence commensurate with the perceived risk to satisfy itself as to the integrity of its suppliers and customers, and the underlying supply chains. Examples of checks to consider were listed in section 6 of Notice 726, a copy of which was enclosed with the letter. • Received at least 16 further tax loss letters issued by HMRC to OWD between 08 July 2015 and 03 March 2017 in connection with transactions commencing with a defaulting trader, resulting in further losses to the public revenue in excess of £1,236,633 combined. • Received a visit from officers of HMRC on 05 August 2015 when there was a discussion relating to alcohol fraud and the pitfalls and dangers involved. An HMRC officer issued Notice 726 and “How to Spot MTIC Fraud” notice and explained that if a supplier’s invoice is invalid, HMRC can deny input tax on the invoice. • Received a letter from HMRC dated 25 September 2015 advising that the VAT registration of one of OWD’s trading partners had been cancelled. • Received a visit from officers of HMRC on 06 October 2015 when there was a discussion about the tax loss letters issued to OWD and the denial of input tax under the Kittel principle. HMRC referred Mrs Bachra to Notice 725, which details how to charge and account for VAT on the movement of goods within the single market and Notice 726. HMRC also provided Mrs Bachra with a copy of Section 10 of Notice 196 which deals with due diligence in relation to the warehousing of excise goods. HMRC also issued a tax loss warning letter, to notify OWD that there was a probable tax loss in its supply chain with two specific suppliers. • Received a letter from HMRC dated 15 October 2015 advising that the VAT registration of one of OWD’s trading partners had been cancelled. • Received a visit from officers of HMRC on 02 February 2016 when HMRC issued Chapter 10 of Notice 196 to Mrs Bachra. An adviser acting for OWD stated that OWD had been reviewing its due diligence since HMRC’s visit in October 2015. HMRC stated that OWD’s due diligence did not go far enough. • Received letters from HMRC dated 05 February 2016 advising that the VAT registration of two of OWD’s trading partners had been cancelled. • Received a letter from HMRC dated 16 March 2016 advising that the VAT registration of one of OWD’s trading partners had been cancelled. • Received a visit from officers of HMRC on 27 July 2016 when there was a discussion about OWD’s suppliers and a sales listing with missing transaction numbers. HMRC issued a schedule 36 request for information and advised OWD to use HMRC’s phone verification line for VAT registration numbers (which OWD had previously been advised to use in a letter from HMRC dated 28 March 2014). • Received a letter from HMRC dated 23 September 2016 relating to due diligence submitted to HMRC for several suppliers who had all had their VAT registration numbers cancelled. HMRC referred to an apparent pattern of OWD’s main suppliers losing their VAT registration and being replaced by another supplier who, after several months, also had their VAT registration cancelled, which suggested a weakness in OWD’s due diligence. OWD was asked to confirm if it was satisfied that its due diligence was sufficient and what improvements it intended to make. • Received a visit from officers of HMRC on 04 November 2016 when there was a discussion regarding improvements to OWD’s due diligence checks. Mrs Bachra stated that she would only deal with companies that had been trading for over a year and would visit them herself. OWD’s accountant stated that he would review the suppliers on a monthly basis instead of quarterly, make financial checks and check the VAT Information Exchange System, an online VAT number validation service operated by the European Union. The trading in which OWD was involved had features which should have put Mrs Bachra on enquiry about the legitimacy thereof, as follows: • During the period 18 June 2014 and 01 March 2017, numerous letters were issued by HMRC to OWD advising it of tax losses involving some of its suppliers. • Despite the value of the goods being purchased, OWD did not enter into any formal written contracts with numerous suppliers. It would be expected that any business carrying on normal commercial trade would ensure that redress in such cases would be set out in a formal written agreement. • OWD’s ability to instantly replace its suppliers that had been deregistered by HMRC at short notice and with goods matching the previous supplier’s goods indicated that the transactions were contrived. • OWD was unable to provide transport details for the defaulting traders and was unable to demonstrate the same audit trail as for genuine suppliers. Despite being aware of MTIC fraud and engaging in transactions bearing the features of such fraud, Mrs Bachra failed to ensure that OWD carried out effective steps, checks and / or due diligence in respect of its trading partners as follows: • OWD failed to verify the VAT registration of its suppliers with HMRC; • OWD was advised to undertake due diligence prior to undertaking transactions to establish the credibility and legitimacy of its suppliers and supplies. HMRC denied OWD the right to deduct its input tax in transactions in the period covering the VAT quarters from 03/14 to 12/16. The due diligence carried out by OWD on its suppliers would only serve to show that each of the companies existed and who their directors were. From January 2015 OWD engaged a due diligence services company to carry out due diligence checks. Due diligence reports issued to OWD during 2015 did not include any references or financial information reports and OWD did not confirm via third party checks and reports that suppliers were credible solvent businesses that would honour their trading commitments. During 2016, OWD began trading with suppliers before due diligence reports were issued to OWD and did not address irregularities highlighted in the due diligence reports once they had been issued. In view of the evident MTIC hallmarks and failure to take adequate steps to reduce risks of involvement with MTIC trading, HMRC denied OWD’s right to offset VAT of £1,706,574 in relation to the VAT periods ended 03/14 to 12/16 inclusive. 

This information is correct as at 23 / 2 / 2024

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