30Sep

In another example of how the Financial Conduct Authority can take action for issues not directly related to an individual’s financial services employment, a financial adviser has been banned for falsifying tax returns relating to his activities for non-regulated firms.

There is no suggestion that the individual failed to correctly declare his earnings from his financial and mortgage advisory firm. However, the FCA has found that he is not ‘fit and proper’. because he failed to declare in his HMRC tax return his income from a hair salon and a DJ business (both of which involved cash in hand payments), nor did he declare his rental income from acting as a private landlord.

His deception continued over a five-year period and was compounded by the fact he provided false information to the FCA in an interview, and also when he prepared an alternative tax return showing a higher income when he made an application for a mortgage in his name. He then used the figures from the lower income tax return to claim working tax credit. It is said that the difference between the annual income figures on the two tax returns totalled £367,757 over a three-year period, leading to him underpaying income tax by a significant amount. For one tax year, his stated income on the mortgage application was eight times higher than the figure in his HMRC return.

The FCA’s Final Notice also notes that the study he undertook for professional qualifications included modules on the UK tax system, and so the regulator concludes that he should have understood his obligations.

He has now been stripped of his approvals to carry out senior management functions and has been prohibited from carrying out any role within financial services.

This follows similar actions against an individual convicted of child sexual offences, and another who repeatedly evaded his train fare.