Estate agent Dylan Davies, 65, has received more than 6,000 letters from tax and customs for overseas companies since September and has been living in fear. The worried man has received hundreds of tax demand letters after Chinese companies used his address to register as a VAT payer. The Chinese scammer says it was very frightening to receive so many notices and not knowing the reason why they were sent to him. Panic grew with each day he waited for bailiffs at his door after more than 11,000 foreign firms used his address to register as a VAT payer.
Tax executives said they found "no evidence of fraud" during the bizarre situation.
Some of the letters contained demands from collection agencies, and when some of them were counted, the amount came out to more than half a million.This was only a small fraction of the letters I had open. The ordeal was very unsettling and the waiting time for a decision was endless, before X-Ray stepped in.
"I was just banging my head against the wall. I wanted someone to admit that there was a big problem through no fault of my own. I wanted to explain my innocence in all this. But there were no answers. I was terrified that all I had was payment for a debt that did not exist.
What was also extremely worrying was that the problem with the tax authorities was closely related to the man's own business. A real estate agency is a daily affair with many people, both clients and partners, and the news that there are tax hiccups speaks volumes about a bad reputation.
Mr Davies claims that before the BBC show noticed his story and got heavily involved, his solicitor in financial matters wrote twice to HMRC ( tax department) but received no reply. As it then transpired the letters had been delivered to the old address and it took some time for the letters to be forwarded correctly to the addressee. During this situation a decision was made to contact the media, after which the department apologised for the delayed response to the appeals due to the impossibility of the debt being calculated. The incident was described as "very odd" and "very curious" and their reference to the committee made it clear that HMRC was confident that "no fraud was perpetrated against HMRC as a result of this incident and it is unclear whether this was an attempt to defraud". After a serious investigation, no evidence of massive fraud was found, there may have been an attempt that didn't work.
The process involved overseas firms selling goods into the UK through online marketplaces such as eBay or Amazon. In January 2021, the law was amended to mean that online marketplaces were responsible for collecting VAT from foreign businesses and paying it to the department. The risks have been recognised that overseas firms could represent a business in the UK and the virtual marketplace will not account for VAT, but the additional checks that sellers must carry out are required to be there to determine where the business is located.Ordinary postal address registration does not pass such tests, so this alone cannot fool the online marketplace into thinking it is a UK business.
Of the 11,000 businesses registered to Mr Davis's address, just over 2,356 of them have tax arrears to the tax department, which means that the firm is primarily responsible for paying the tax. However, registration to pay VAT does not require proof of residence at a UK address.
Until the problem of addresses to correspond with these 2,300 businesses is resolved, no further checks can be carried out, and this category meets certain risk criteria, which may include a request for evidence that the company is based at the address given.
The logical question that arises after such an absurd and very unpleasant crime is why would overseas companies suddenly want to register their UK address as a flat in Wales? The answer is no as it is a mystery because the office address that our company serves is known and it is very similar to the address of another client, but these are two different addresses, so there is simply no answer at this point in time. In order to investigate it is necessary to know which address and there is no information.
After the meeting Mr Davis was "stunned" and "surprised" by the response that HMRC had found no fraudulent intent in the incident. He was told by an official letter that ongoing investigations into the incident had produced no evidence of any fraud against the committee. An apology has been issued to the landlord for the inconvenience caused and it has been added that any vulnerabilities in the tax systems arising from an inaccurate interpretation of the amendments to the tax law.