Former 39 Essex Street silk guilty of £600,000 VAT fraud

Former 39 Essex Street silk, Rohan Pershad QC, has been convicted of tax fraud.

Rohan Pershad QC
Rohan Pershad QC

Pershad was found guilty of cheating the public purse after “deliberately” not paying a total of £600,000 VAT over a period of 12 years. The jury took almost 10 hours to convict him on a majority of 11-1.

It is the first high-profile prosecution of a lawyer since HMRC announced a taskforce to crackdown on tax evasion in the legal profession.

A jury at Blackfriars Crown Court had heard that Pershad had “disappeared off the VAT radar” in 1999 after he left 2 Crown Office Row for 39 Essex Street.

HMRC considered him to be a “missing trader” until he was questioned about not paying tax on his services billed as a barrister in 2011.

Prosecutor Andrew Marshall QC of 18 Red Lion Court, said this had provided Pershad with a “private tax-free income of £600,000” and in that time he bought two homes – a property in Somerset for £490,000 and another in Virginia Water, Surrey, for £1,105,000.

Pershad instructed Kingsley Napley partner Angus McBride and had denied the allegations from first being charged last summer (31 July 2012). He pledged to “defend himself vigorously” and had 9-12 Bell Yard head of chambers Mukul Chawla QC as counsel.

The financial disputes, professional negligence and professional liability barrister told the court that he believed his chambers – 39 Essex Street – paid his VAT bills for him. He claimed he was under the impression his higher members fee at his new chambers meant it would take care of his payments.

Pershad, described as “financially astute” by the prosecution, told the jury that he was “extremely poor at paperwork” and was naive about why his new set charged between 22 and 26 per cent of his fees and “wasn’t that interested” in how much he was paid.

He told the court: “I don’t have a pension, I never did. I don’t have stocks and shares, I never have. I didn’t see myself as running a business. I was a barrister.”

However, Marshall described this as an “absurd explanation”. He 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’d all be trying to get in there.”

A string of senior figures at various chambers gave evidence that barristers are self-employed and are solely responsible for declaring their own income and filing tax returns.

They included 2 Crown Office Row’s former head Christopher Purchas QC, 20 Essex Street senior clerk Brian Lee, and David Barnes, chief executive and director of clerking at Pershad’s former chambers 39 Essex Street.

Keri Ashworth-Beaumont, specialist prosecutor from the CPS Central Fraud Division, said: “Rohan Pershad QC failed to pay VAT for a period of 12 years, despite charging his clients that VAT. As a result, he retained an additional private income of £624,579, which should have been paid to HMRC and the public purse. By convicting him today, the jury has concluded that Pershad was acting dishonestly and his failure to pay was not simply an error or mistake.

“He claimed that his chambers had given the impression that payment of his VAT had been taken care of, but the jury clearly rejected that assertion. Pershad always admitted that he understood the law and the responsibility for meeting his obligations rested on him alone.

“The message is clear: paying tax is not an optional extra in any area of working life and withholding tax dishonestly may lead to prosecution.”

Following the verdict, HMRC revealed that Pershad was still filling out self-assessment forms, but used an invalid VAT number on invoices and pocketed the money himself rather than pay into the public purse. The forms showed that his income increased from £85,000 in 2001 to £346,000 in 2008.

HMRC confirmed that it will now go after Pershad’s cash, meaning he could be forced to sell his two homes. A spokesman said confiscation proceedings are underway.

Donald Toon, director, criminal investigation at HMRC, said: “Pershad’s 12-year history of tax evasion was blatant theft from the public purse. He thought he was above the law, but someone in his profession should have known better than to try to cheat the system, as HMRC will not stand by while criminals try to cheat the taxpayer.

“Declaring and paying VAT that is due is a legal requirement – not a lifestyle choice – so we are pleased that justice has been served. We’d like to thank the chambers involved for their assistance in this case.”

A statement from Pershad’s former chambers said his membership had been terminated. It said: “Clearly this is a difficult time for Rohan, as well as his family. However, it is and always has been clear that all members of these chambers, in common with all other self-employed barristers, are personally responsible to account to, and pay, HMRC for VAT received, and for income tax, and it is right that tax evasion should be appropriately punished when proved.

“On notice of his prosecution, Rohan agreed to the voluntary suspension of his membership of chambers pending the outcome of the trial, and given the circumstances he will no longer be a member.”

Pershad’s lawyer McBride said his client would not be commenting while awaiting sentence. He will be sentenced on 26 February.