Landmark R&D Tax Credit Fraud Case: Bennett Verby Ltd

Bennett Verby Ltd, a Stockport-based accountancy firm, has been the first company to be prosecuted under Section 45 of the Criminal Finances Act 2017 – Failure to Prevent the Facilitation of Tax Evasion. The allegations involve fraudulent R&D tax credit claims for over £16 million in R&D tax credits and bounce back loans.

This case is being widely regarded as a landmark prosecution involving R&D tax credit fraud and has significant implications for both tax advisors and businesses submitting R&D claims.

Six individuals, including a former director, have been charged in detail with the following: 

COUNT ONE

Conspiracy to make articles for the use in fraud, contrary to section 1(1) of the Criminal Law Act 1977. It is alleged that between 1st January 2021 and 1st April 2021, four individuals conspired to “make articles, namely articles associated with companies, including but not limited to Companies House Forms, web pages, LinkedIn profiles, applications for bank accounts and company accounts, knowing that they were designed or adapted for use in the course of or in connection with fraud.” 

COUNT TWO

Conspiracy to cheat the public revenue, contrary to section 1(1) of the Criminal Law Act 1977, the same four individuals are also charged that they “conspired to cheat the public revenue of monies by making applications on behalf of companies to the Bounce Back Loans Scheme, which they knew the companies were not eligible for.” 

COUNT THREE

Count three is also a charge of Conspiracy to cheat the public revenue, contrary to section 1(1) of the Criminal Law Act 1977. This involves the same four individuals from Count Two, plus two additional parties. Between 1st March 2021 and 9th February 2022, they allegedly conspired to “cheat His Majesty’s Revenue of R&D tax credits by dishonestly submitting false corporation tax returns to support false claims for tax relief under the Research and Development Tax Relief scheme on behalf of companies they knew were not entitled to the relief.”

This count represents a direct allegation of R&D tax credit fraud, marking a significant step in HMRC’s crackdown on abuse of the R&D incentive scheme. 

COUNT FOUR

Transferring Criminal Property, contrary to section 327(1)(d) of the Proceeds of Crime Act 2002, three individuals, between 1st March 2021 and 9th February 2022, together “transferred criminal property, namely, the R&D tax relief credits they had falsely obtained from the submission of false corporation tax returns on behalf of companies they created, knowing or suspecting the credits to represent whole or in part the proceeds of criminal conduct.” 

This highlights how R&D tax credit fraud can also lead to wider money laundering and proceeds of crime investigations.

COUNT FIVE

Failure to Prevent the Facilitation of UK tax evasion and contract to the Criminal Finances Act 2017, and relates to Bennett Verby Ltd in the period between 1st January 2021 and 9th February 2022, they were “a relevant body” whilst a former director committed UK tax evasion offences, “namely conspiracy to cheat His Majesty’s Revenue and Customs when a former director acted in the capacity as a person associated with Bennett Verby Ltd.” 

This fifth count has made waves across the accountancy profession, marking the first time a firm has faced charges of failing to prevent tax evasion under section 45 of the Criminal Finances Act (2017).

At the Manchester Crown Court on 7 August 2025, all individuals appeared but did not enter any pleas. 

The trial is scheduled for September 2027 and is expected to last 12 weeks.  

Names of the defendants have appeared in the public domain, but I have chosen to keep their anonymity in this article.  

Why Does This Case Matter? 

This is the first test of a law long seen as dormant, as the Criminal Finances Act 2017 has been around for eight years. It also signals HMRC’s shift toward active Corporate Criminal Offences enforcement of tax advisors facilitating fraud and using the ‘failure to prevent’ offence since the introduction of the legislation. Previously, HMRC had relied on civil channels, rather than testing the criminal laws. Prosecutors must prove not only the underlying tax evasion but also its facilitation and the corporate failure to implement ‘reasonable procedures’.  

In January 2025, HMRC announced through a Freedom Of Information release, that there are currently 11 live CCO (Corporate Criminal Offences) investigations, with Bennett Verby likely one of these. Another 28 potential cases are live opportunities that are currently under review, across several sectors (software providers, labour provision, accountancy and legal services). HMRC have previously rejected an additional 114 opportunities. HMRC anticipate these numbers to change, as matters progress, with further releases of FOI to come. 

Further legislation 

On 1st September 2025, the new ’failure to prevent fraud’ offence under the Economic Crime and Corporate Transparency Act will come into force. This offence takes the same strict liability approach and applies it to fraud, one of the most pressing economic crime risks facing UK businesses. Large organisations will be criminally liable if a person associated with them commits fraud for their benefit, unless they can show they had “reasonable prevention procedures” in place. 

At the same time, Companies House is changing the requirements for company registration. Gone are the days when anonymous shell companies could be set up in minutes with little scrutiny. New powers allow the registrar to verify identities, reject suspicious filings, and dig deeper into complex ownership structures. The intention is clear: cut off fraud, money laundering, and tax evasion at the source. 

Implications for Businesses 

HMRC issued a guide for companies in 2017 on the preventative measures they can take to prevent their representatives from helping clients avoid tax under the Criminal Finances Act 2017: 

• Conduct risk assessments. 

• Implement and document prevention procedures. 

• Top-level commitment to communicate, train employees and associated persons. 

• Due Diligence, monitor and review controls. 

• Promote a culture of compliance. 

These steps are increasingly relevant for any firm involved in submitting or advising on R&D tax credit claims, given the growing focus on preventing R&D tax credit fraud.