Former 39 Essex Street silk Rohan Pershad QC, who is facing allegations of VAT fraud, thought his chambers paid his VAT bill for him, a jury has heard.
Pershad denies claims he knowingly cheated the public purse by not paying £600,000 VAT on his services over 12 years.
Prosecuting counsel for HMRC, Andrew Marshall QC of 18 Red Lion Court, said it was “nonsense” for Pershad to blame his set when it was common knowledge that barristers were responsible for their own tax bills.
Marshall told the court that until July 1999 Pershad had made regular, if sometimes overdue, VAT payments on fees while he was a member of 2 Crown Office Row.
It was when he moved to 39 Essex Street in 1999 that he “disappeared off the VAT radar”, Marshall said. HMRC had considered him to be “a missing trader” and that he made no further VAT payments before being questioned about it in 2011.This provided him with a “private tax-free income of £600,000”, Marshall told the court.
Marshall showed the jury Pershad’s online profile on the 39 Essex Street website, highlighting some of the complex financial cases he has been involved in.
Marshall said: “This is a man who is financially astute and used to looking at other people’s business, dissecting it and finding fault with it.”
While Pershad was a member at 2 Crown Office Row between 1993 and 1999, the set charged 18 per cent of barrister’s income to cover running costs, the court heard. When he moved to 39 Essex Street, the rate fluctuated from between 22 per cent and 26 per cent.
Marshall said Pershad had given an “absurd explanation” for the missing payments and that Pershad claimed he believed the set was making the payment for him.
“The reason why chambers charged more is he was moving to a smarter set, better accommodation, more staff, better services, international reach and attracting the best work. All of this costs money,” Marshall said.
“He was paying a higher contribution no doubt thinking he would get better work. They do not charge 22 per cent of a barrister’s net fees and then pay 17.5 per cent to HMRC. That would leave them with a single figure and make them the cheapest place around. We would all be trying to get in there.”
The seven-day trial will hear witness statements from the former head of 2 Crown Office Row, Christopher Purchas QC, and 39 Essex Street chief executive and director of clerking, David Barnes. Marshall told the jury they will say that it has never been the practice for the chambers to pay barristers’ VAT bills.
Pershad, who has withdrawn his membership of 39 Essex Street by mutual consent while the trial take place, denies the charge (31 July 2012).
The case continues.