A professional tax adviser to the wealthy was today sentenced at Blackfriars Crown Court to 18 months in prison for cheating HM Revenue.

David Perrin, 46, of Leagrave, Luton, Beds, was operating a tax avoidance scheme at London-based Vantis Tax Ltd which he sold to wealthy taxpayers to exploit the law on giving shares to charity, abusing Gift Aid rules.  The scheme was sold to the wealthy individuals between 2005 and 2006.

He was given an 18 month sentence to be served in two parts. The first half will be a custodial sentence followed by a second half when he will be released under licence but will be liable to be returned to serve the remainder of the sentence if he commits any further offences.

He will also be forbidden to serve as a director of a company for eight years. No orders for costs of compensation were given but it is believed a confiscation of assets hearing will take place in the summer.

The judge, Mr Justice Blacksell QC, said 18 months was the least possible sentence he could give and he took into account Mr Perrin's defence.

Before the sentence, Mr Perrin's defence lawyer Andrew Trollope QC had given a lengthy submission regarding Mr Perrin's health, saying Mr Perrin suffers a pancreatic condition which requires him to self medicate with powerful painkillers.
Mr Trollope questioned whether his client would receive suitable medication under the prison regime.

Mr Justice Blacksell told Mr Perrin: "Your sentence has been reduced because of the able mitigation and taking into account your medical condition.
"Your defence lawyer has described your actions as a 'substantial error of judgement' and while that is true that is just the start of it.
"You were a professional and knew that this scheme would never stand up and could never stand up to close scrutiny."

Mr Perrin, a former Inland Revenue employee, was found guilty at an earlier hearing at Blackfriars Crown Court of trying to defraud taxpayers of £70m.  He spent his cut of the stolen cash on expensive second homes, exotic holidays, works of art and luxury cars.

Mr Perrin was deputy managing director at Vantis Tax Ltd, which is now in administration, and devised and operated a tax avoidance scheme which he sold to wealthy taxpayers in order to exploit the law on giving shares to charity. The scheme allowed him to pocket more than £2m in fees from their unsuspecting clients.

Mr Perrin used a network of finance professionals to advise more than 600 wealthy clients to buy shares, worth a few pence each, in four new companies he had set up. He then listed the companies on the Channel Islands Stock Exchange and paid people money from an offshore account to buy and sell the shares to inflate their price.

The shareowners then donated 329 million shares to various unsuspecting registered charities and tried to claim £70m tax relief on a total of £213m of income and company profits. This was based on the shares being worth up to £1 each, rather than the pennies they were originally bought for.  Mr Perrin also used the bogus scheme to claim money back through Gift Aid, a scheme normally used by bona fide charities to reclaim tax on donations.

The scheme proved so popular that Vantis employees performed a smug celebratory song at their annual conference, to the tune of "I will survive".  It included the verse: "They should have changed that stupid law, they should have buggered charity, but they have left that lovely tax relief, for folks to pay to me."

Jim Graham, HMRC criminal investigator, told the trial: "With his knowledge of the tax system, Perrin thought that he was one step ahead of both HMRC and the law. This cynical fraud not only stole millions of pounds from taxpayers, but also conned innocent charities into accepting gifts of virtually worthless shares, just so Perrin could inflate his own criminal earnings."

David Perrin worked for the former Inland Revenue in the late 80s/early 90s. Mr Perrin's colleague Mr Faichney is awating retrial in September after a jury failed to make a decision on his case.