Construction company fined after admitting tax fraud

A local construction company has been fined more than £31,000, with a further £47,000 confiscated by the courts, after admitting to tax fraud.

Victoria Construction Limited pleaded guilty to two counts of false accounting, relating to corporate tax returns for 2019 and 2020, and one count of possession of criminal property.

The Directors, Spanish nationals from Estepona and Casares, were arrested in January last year.

The court heard the company falsely claimed it had made losses in both years, when in fact it had turned substantial profits.

GBC understands it is the first corporate confiscation order made by the courts.

In a statement, the Royal Gibraltar Police described the outcome as reaffirming the RGP’s "ongoing commitment to pursue economic crime and ensuring that anyone seeking to evade legal obligations is held accountable for their actions."

Victoria Construction Limited is no longer trading.

In 2019, Victoria declared a loss of more than £70,000, when it had actually made taxable profits of over £265,000.

In 2020, it declared just £6,600 in taxable income, when profits exceeded £113,000.

The fraud came to light after a local property developer identified discrepancies in accounting records and reported the matter to police. An investigation by the Royal Gibraltar Police Economic Crime Unit followed.

The court was told the company benefited by more than £47,000 in unpaid tax and late payment surcharges. This will now be recovered through a confiscation order under the Proceeds of Crime Act.

Prior to conviction, the court had ordered the restraint of more than £173,000 held in the company’s bank account. The confiscated sum and the £31,510 fine will be paid from those funds.

In sentencing, the judge, Liam Yeats, noted the company had no previous convictions and had cooperated with the investigation, including voluntarily disclosing further under-reporting beyond what police had initially identified.

The company’s lawyer, Philip Dumas, said it was clear the tax office and police were taking these types of offences seriously.

James Lennane acted for the Crown.