Former 1 Gray’s Inn Square barrister jailed for £80k tax fraud

Former 1 Gray’s Inn Square barrister Edward Agbaje has been jailed for 18 months after failing to pay more than £80,000 in tax to HM Revenue and Customs (HMRC).

The City barrister appeared at the Old Bailey today charged with two counts of cheating the public purse. He was represented by Graham Trembath QC of 5 Paper Buildings.

Agbaje, who was declared bankrupt in 1999 and 2008, was found guilty of not paying more than £80,000 in tax over a period of seven years, despite collecting more than £59,000 in VAT on fees from clients. He claimed in court to have gambled the proceeds.

“As a barrister Agbaje should have known better than to try to cheat the system,” commented Andrew Sackey, the assistant director of HMRC’s criminal investigation. “He thought he was above the law but HMRC will not stand by while criminals try to cheat the taxpayer. Declaring and paying VAT due is a legal requirement – not a lifestyle choice – so we’re pleased that justice has been served.”

Abaje was discovered by the HMRC during a routine VAT visit to his chambers, when it was found that he was continuing to trade using a deregistered VAT number on invoices. Andrew Marshall of 18 Red Lion Court, instructed by HMRC assistant director John Pointing, was initially prosecuting.

This is the second high-profile tax fraud sentence for a barrister in less than a month. In February former 39 Essex Street silk Rohan Pershad QC was jailed for three and a half years after being found guilty of VAT fraud (26 February 2013). Marshall was also the prosecuting counsel for HMRC in that case.

The convictions come after HMRC launched a task force to crack down on tax dodgers in the legal profession in response to specific intelligence (18 September 2012). It is part of a nationwide operation by HMRC, which is looking to recover a total of £19.5m from a number of trades, including grocery and retail in Wales, the North West and South West, hair and beauty in the North East, restaurants in the South East and Solent, and the Scottish motor trade.

However, the deliberate targeting of the bar angered the Bar Council, which claimed last year that HMRC did not communicate with it.

“It is not, at present, clear to us exactly why the legal profession has been targeted by HMRC. Barristers provide an essential, front-line public service which is crucial to the smooth running of our country’s excellent and world-renowned justice system,” said Bar Council chairman Michael Todd QC in September. “The law is one of the UK’s strongest exports, and barristers and solicitors bring billions in revenue to the UK every year.”

Agbaje was last year suspended from 1 Gray’s Inn Square pending the outcome of proceedings. He subsequently left the set.