More than 5,000 companies were formed over the last year by Chinese nationals using addresses in Northern Ireland where the home, business owners or residents are believed to have no connection to the companies.
Companies using addresses across the north, some fictitious, are trading on sites like Amazon but are using historically lax registration rules likely as part of some type of VAT fraud and to evade potential tax liabilities, according to a leading fraud expert.
Chinese nationals are listed as directors, many of them claiming to be involved in trading online and with no other connection to the address.
Letters have dropped into houses and businesses from the HMRC, Companies House congratulating the new director and company, and even solicitations from UK-registered banks.
Homeowners who contacted The Irish News said the burden of proof was on them, one explaining it took two months for a company to be scrubbed from his address.
Fraud expert Graham Barrow, a former banker, believes many of the companies are involved in illegal activity. While similar type of activities have emerged in Britain, for its size the scale and numbers in the north are astonishing, Mr Barrow added.
The Irish News, with Mr Barrow’s assistance, has tracked at least 5,000 similar companies registered between January 1, 2023, and this week. Approximately 1,600 were registered since December 1 last year.
Pat Storey, from Portglenone in Co Antrim, first became aware a company was registered at his address when a letter from HMRC dropped through the letter box.
Mr Storey then was frustrated with the “hoops you have to go through to prove you are the legitimate owner of the address”.
In order to force the removal of the company from an address, two forms need to be filled in, supporting documents added, before filing, then letters are sent back to the premises.
Under the law, the director and company have at least 28 days to respond. In total, it took two months for Mr Storey to have the address removed.
Mr Storey is baffled there is no vetting in place, but Companies House currently has few powers to verify information.
“From March, we will use our new powers to act more quickly if people tell us their personal information has been used on the register without their consent,” a spokesman said, referring to a new economic crime law.
The agency “will have greater powers to query and remove fraudulent information and share information with law enforcement”.
Companies registered in the UK can self-declare VAT if trading on Amazon or similar sites. Since January 2021, online marketplaces such as eBay and Amazon have been liable for the VAT from sales made by overseas traders on their platforms.
But non-established taxable persons who have incorporated in the UK and provided UK address details to marketplaces can avoid those rules.
A HMRC spokesperson said: “Residents should not be concerned about their tax liability in this situation. Anyone receiving letters from HMRC for a business they aren’t aware of at their address should return the post to HMRC marked ‘not at this address’ and report it to us.”
Companies with addresses in the north are directly linked to the sale of all types of products, from electrical goods to telescopic ladders to teeth whiteners.
One homeowner, from Belfast, received letters not only from Companies House welcoming the director, but also a solicitation from a UK-registered bank offering services.
He also had difficulty filing the paperwork and supporting evidence online and ending up physically going to Companies House in the city centre and placing the documents in an intray in the foyer of the building.
