A bookmaker who fraudulently under-stated his income to the tax authorities has been hit with a crushing back-tax and penalties bill for more than £26,000.
Tax inspectors swooped on Steven George O’Malley, who ran “Steve’s Racing” at the back of the Shepherds Arms pub, in Eaves Lane, Chorley, and discovered that his lifestyle simply did not match his declared income from the business.
Investigators’ records put the father-of-four’s personal spending at almost £40,000 in a single year, more than £13,000 above his declared income from all sources, including benefits, and a tribunal judge has now rejected his plea that his own success as a gambler explained the difference.
Following the tax investigation, Mr O’Malley was hit with a demand for £17,508 in income tax, national insurance and general betting duty for the three years 2006-2009, along with penalties totalling £9,162.
Judge Jonathan Cannan, sitting at the First Tier Tribunal, has now rejected his appeal against those bills after finding that his failure to declare his true business income was “fraudulent and deliberate”.
Ruling that there was nothing excessive about the tax demand, the judge said that Mr O’Malley’s failure to keep adequate business records gave him “the opportunity to suppress his takings and we find that this was a matter of design rather than inexperience or carelessness”.
Also upholding the penalties as appropriate, the judge said: “We have found that Mr O’Malley’s conduct was fraudulent and deliberate”.
The tribunal also heard evidence that many of Mr O’Malley’s punters came from the pub next door and he managed to compete with much larger High Street betting shops by matching their odds and “providing a personal service”.