Cranside Kitchen, Pickled Ginger and Halloumi restaurant owners admit £682,882 VAT fraud

Two leading restaurateurs and their accountant have admitted involvement in a large-scale VAT fraud.

Antonio Carbajosa, 41, Kevin Campbell, 44, and Khalid Javid, 67, were busted after a HMRC probe.

Carbajosa and Campbell ran a group of venues in Glasgow including Cranside Kitchen, Pickled Ginger and Halloumi.

Javid meantime was a well known Scottish independence supporter, who was photographed a number of times with former first minister Nicola Sturgeon.

Antonio Carbajosa, 41, Kevin Campbell, 44, and Khalid Javid, 67 Spindrift

Carbajosa and Campbell pled guilty to fraudulent evasion of VAT totalling £682,882 between November 2011 and October 2016.

Khalid meantime admitted recklessly making a statement which was false in that he submitted VAT returns for two companies.

Details of the case could not be reported until Khalid’s case has been resolved.

He had been due to stand trial before also pleading guilty on Monday.

Carbajosa and Campbell were sentenced to three years each for their crimes.

The court heard that Carbajosa and Campbell were associates who ran various restaurants and takeaways across Glasgow.

It was stated that the pair “acted together in a co-ordinated way” in the lucrative scam.

The men “supressed” the true value of sales for their limited companies that were registered.

The firms between them included Cyprus Leisure, Rotunda Leisure, Lookoil, Catering 58, Beachfront, Seaside 41, South Promenade and La Reguera.

The accountant’s KA Javid & Co were instructed by Carbajosa and Campbell.

KA Javid & Co created the firms’ VAT returns and dealt with other matters such as PAYE, corporation tax as well as annual returns to Companies House.

Carbajosa and Campbell meantime were responsible for creating and maintaining business records to calculate VAT.

Prosecutor Wojciech Jajdelski said: “Carbajosa and Campbell did not comply with the VAT requirements in order to profit, in the longer term, from their restaurant businesses by not accounting for all of the VAT due to HMRC.

“As a result of not all VAT due being paid to HMRC, the companies were more profitable than they would otherwise have been.

“The companies were able to finance their commercial activities, including payments of staff wages, out of the sales income part of which ought to have been accounted for HMRC.

“Carbajosa and Campbell were also able to take more money out of the companies as their personal income than they otherwise would have been able to do.”

The hearing was told that VAT was to be added to goods and services supplied which would be accounted to HMRC.

Despite some of the businesses selling sushi takeaway food which required no VAT, most of the supplies were subject to 20% tax.

The offending came to light of HMRC investigators due to initial discrepancies in returns from two of the businesses.

This resulted in Operation Keyholder and a forensic accounting report was prepared between August 2012 and October 2016.

Mr Jajdelski said: “The Crown accepts for present purposes that the total sum to which the fraudulent evasion of tax by the two men amounted was £682,882.”

The advocate depute added that all of the relevant companies had an annual VAT turnover which was “significantly” in excess of that year’s registration limits.

Furthermore, three of the companies were not registered for VAT and did not pay tax on sales generated by them.

Mr Jajdelski said: “This was done personally or through Khalid Javid and/or his staff on VAT returns submitted to HMRC.

“Carbajosa and Campbell knew that the sales information provided in the VAT returns were false.”

The advocate depute stated that HMRC made a total loss of £136,576 from Javid’s actions.

Mr Jajdelski said: “In relation to two of the companies, Mr Javid recklessly made statements in the relevant VAT returns which were false.”

This included failing to give the correct sales and output VAT as well as seek clarification from the two men about figures.

It was also said a 20% reduction to all sales figures without a “proper factual basis” was carried out.

Sentence was deferred on Javid pending background reports until next month at the High Court in Glasgow.

He was granted bail meantime by Judge Lord Young.

Javid was linked to a Holyrood probe in 2010 after it emerged that he paid £2,000 at a Glasgow auction event for lunch with then deputy first minister Nicola Sturgeon.

Javid had bid £260 the previous year for a tour of the Scottish Parliament.

Despite the SNP saying that none of these events had taken place and no donations had been received, the complaints against Ms Sturgeon and then First Minister Alex Salmond were dismissed.