HMRC: Solicitor faced bankruptcy
A solicitor who took £90,000 from client account to pay his personal tax bill and avoid bankruptcy has been struck off by the Solicitors Disciplinary Tribunal (SDT).
The SDT heard that Major Singh-Raud made the transfer to the HM Revenue & Customs (HMRC) the day before the Solicitors Regulation Authority (SRA) decided to shut down his firm.
The solicitor was convicted of a tax-related offence four months earlier, pleading guilty at Stockport Magistrates’ Court in June 2017 to a charge of continuing to provide services where VAT was charged, despite a notice of requirement being issued by HMRC.
This demanded that he provide security of over £53,000 if he was to continue providing services where VAT was charged. Mr Singh-Raud provided only £20,000. The court fined him £3,000.
The tribunal heard that Major Singh-Raud told the SRA’s intervention officer that “the transfer was for HMRC to ensure that they did not declare him bankrupt” after being served with a statutory demand from HMRC for over £195,000 in May 2017.
The intervention officer tried to stop the transfer from the client account of Major Singh-Raud Solicitors – which took place on a Sunday – but was told by its bank that the money could not be returned.
By the end of March 2018, Mr Singh-Raud had not only failed to return the client money, but he had also refused to provide his consent for HMRC to release information to the SRA.
The solicitor was born in 1977 and admitted to the roll in 2002. The SRA launched an investment in May 2017 following a report to the SRA that he had failed to pay professional disbursements worth over £58,000.
The SDT found that Mr Singh-Raud had acted dishonestly in transferring the £90,000 from client account, and had also breached SRA Principles, including principle 2 (acting with integrity), and the accounts rules.
Mr Singh-Raud denied the allegation, agreeing that £90,000 was withdrawn from client account, but saying that only £80,000 was sent to HMRC, with £10,000 returned to client account to cover damages due to be paid to clients.
“[He] stated that he ought to have transferred the funds from client to office account and then to his personal account. His failure to do so was a failure to adopt the correct procedure.”
However, the tribunal said he provided no evidence to show that it was not client monies he was using, noting that he had not claimed them to be to the SRA’s intervention agents. Further, he had not rendered any bills to entitle him to the money.
And even on his own case, he had taken £10,000 of client monies.
The solicitor was also found to have breached the accounts rules by making other withdrawals between January 2016 and October 2017, which he admitted, and failed to keep proper accounting records, which he admitted in part.
Mr Singh-Raud admitted leaving money for professional disbursements in office account, in breach of the accounts rules, and admitted in part failing to run his business properly.
He was struck off the roll and ordered to pay just under £19,000 in costs.
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