A four year investigation (and subsequent court case) by HMRC into alleged £500K red diesel fraud has gone down the toilet thanks to HMRC's systemic failures.
Judge Robert Trevor-Jones said the fraud case showed "lamentable negligence" and was indicative of a more widespread problem.
In December 2013, officers from customs and excise (HMRC) raided tanker driver Peter Norton's home. He was charged with others with conspiracy to evade VAT by selling nearly £500,000 of laundered so-called red diesel fuel.
Red diesel is only legal for off-road vehicles such as tractors, and has a much lower VAT rate.
A VAT fraud involving the fuel works by removing the red dye to make it look like regular diesel before the fuel is then sold on fraudulently at the higher VAT rate.
Peter Norton has always denied any wrongdoing.
After a four-year investigation by HMRC, the case went to trial in January at Liverpool Crown Court.
However, one month into the trial, a vast amount of information that should have been disclosed to the defence was identified on the laptop of the HMRC investigating officer, Daniel Grundy.
The prosecution asked for an adjournment to sift through the material that should have been disclosed.
Judge Trevor-Jones refused and the trial collapsed.
In his ruling, he said:
"I accept that the failure here can properly be described as negligent, but it was negligence to a lamentable degree.The same disclosure failings meant that a linked trial of petrol station owners, due to begin a few weeks later, was also abandoned.
It is indicative of a more systemic failure going beyond the omissions of just one officer."
The competence, even credibility, of the investigative team has clearly been tainted."
Lawyers in the case estimate the two trials cost in excess of £2m of public money.
Tax does have to be taxing.
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