Brothers banned from business ownership over multi-million pound tax evasion

Two businessmen from Yorkshire have been sentenced for tax evasion of over £3.2 million, after they set up offshore companies to hide large profits from a land sale.

Brothers Michael Hirst, 54, from Wakefield, and Stephen Hirst, 61, from Bridlington, both pleaded guilty to cheating the public revenue and were sentenced today at Leeds Crown Court.

Both men have been disqualified from acting as a company director for eight years.  Additionally, they were both jailed for two years with the sentence suspended for two years and, as a condition of the sentence, the Judge ordered Stephen Hirst to pay a fine of £12,000 and Michael Hirst a fine of £8,000.

The prosecution showed that the evasion of tax was planned over many years. In August 1999, a company owned by the brothers called ‘Heritage Holdings Limited’ bought land on Park Drive in Wakefield for just over £700,000.

The brothers split the Park Drive land into four parts and sold some of the land, for a lot less than it was worth, to a second company ‘TIMS Investments Ltd’, which was registered in Gibraltar but run by the defendants from the UK.  They also set up another company of the same name in the British Virgin Islands.

In March 2007, the land was sold for over £10 million after planning permission was granted. This should have generated a tax liability of over £3.2 million, however the brothers did not declare this to HMRC, and used their offshore businesses to hide the profits.

When HMRC began make enquiries, both men were given a chance to declare any tax liability. Instead, they complicated the investigation by failing to declare any association with their offshore companies in statements to HMRC.

Michael Hirst and Stephen Hirst pleaded guilty to cheating the public revenue on 18 July 2023 at Leeds Crown Court.  At the defence request, sentencing was deferred by the court for a total of 12 months, to enable the brothers to voluntarily pay both the tax owed and the prosecution costs of bringing the case to court.  The tax and prosecution costs have now been repaid.

Andrew Fox from the Crown Prosecution Service said: “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.”

Zoe Gascoyne, Deputy Director, Fraud Investigation Service, HMRC, 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.”