Wakefield brothers 'lied' and 'manipulated the system' over housing-land tax scam, investigators say

The pair moved the £11 million they received to various offshore accounts they had set up, thus avoiding paying the £3.2 million tax bill the sale would have incurred.

The pair escaped custodial sentences today at Leeds Crown Court, but only after they paid the tax back, along with prosecution costs.

Speaking after sentencing, Zoe Gascoyne, deputy director of the Fraud Investigation Service at His Majesty’s Revenue and Customs, said: “Stephen and Michael Hirst had numerous opportunities to be honest about their tax affairs.

“Instead, they lied about the network of firms and ownership structures they had set up to commit fraud and have ended up with criminal convictions. We are pleased to have recovered every penny of the money they stole, which will now be used on the public services we all rely on.

“We continue to work tirelessly to ensure the tax system is fair to all and this case shows once again that we will work with international partners to ensure a level playing for all taxpayers.”

Andrew Fox from the Crown Prosecution Service added: “The defendants dishonestly manipulated the system and made every attempt to evade their tax liabilities. The amount of unpaid tax was substantial, and involved millions of pounds that should rightly have been paid into the public purse. We are pleased to have secured justice and the repayment of the tax.

“Our specialist prosecutors will continue to work closely with investigators such as HMRC to prosecute cases of tax fraud and bring perpetrators to justice.”

In 2007 they transferred a large plot of land off Park Drive in Lofthouse to a company of the same name in Gibraltar for little over £60,000 - way below its market value.

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This land, which has since been developed into the Lofthouse Park housing estate, was sold by the Gibraltar-based company for almost £11 million three years later. The brothers then moved the cash around to “avoid scrutiny further”, Leeds Crown Court heard. They should have declared ownership of the offshore companies and paid tax on the sale of the land – but they failed to do so and evaded £3.2 million in Corporation Tax in the process.

They even tried to claim they were running the offshore firms for an Iranian businessman who had since died, but this was rubbished by the court.

Both received a two-year sentence, suspended for two years. Stephen Hirst was ordered to pay a £12,000 fine, and Michael Hirst to pay an £8,000 fine. They were both banned from running a company for the next eight years.