Ex-Inland Revenue tax consultant jailed for for payroll fraud

21 August 2018

Mike Hughes who worked for the Inland Revenue in the 1980s led a conspiracy which used a string of UK and offshore companies and bank accounts to steal £6.9 million through fraudulent payroll schemes.

The money, which should have been paid to HM Revenue and Customs (HMRC), was split between Hughes and his co-conspirators.

Hughes left the UK in September 2011, travelling to Chile and Dubai before setting up home in Northern Cyprus, which does not have an extradition treaty with the UK. He was arrested by HMRC investigators at Heathrow Airport in January 2018 when he arrived on a flight from Istanbul, Turkey. In October 2016 his three co-conspirators were jailed for a total of 19 years.

Hughes was found guilty of three counts of conspiracy to cheat the public revenue, two counts of false accounting and furnishing false information and one count of money laundering. He was jailed on 16 August 2018 for nine-and-a-half years for conspiracy to cheat the public revenue; three and a half years for false accounting; and six years for money laundering. He was also disqualified from being a company director for 12 years.


Alison Chipperton, Assistant Director, Fraud Investigation Service, HMRC, said:

“Hughes and his criminal fraternity were driven by greed, abusing systems that are designed to ensure workers are paid correctly and taxes paid to HMRC. Hughes deliberately fled the UK and moved to a country without a UK extradition treaty in an attempt to evade justice. He was arrested as soon as he returned to the UK, and is now paying the price for his crimes.

They were all professionals who broke the law, but as a tax consultant and former Inland Revenue employee, Hughes’ role as the criminal mastermind is even more deplorable. Tax evasion isn’t a victimless crime, it is theft from public services used by us all.”


HMRC and the National Crime Agency (NCA) are aware of the threat of payroll scams operating in the UK, and remind businesses to ensure that they carry out ‘due diligence’ checks before appointing a payroll company to act on their behalf. Anyone who believes they have information, or may be a victim of payroll fraud, can report it online or by calling 0800 788 887.

HMRC press release