**Portsmouth Businessman Sentenced After Splurging HMRC Taxes on Luxury Goods**
A former takeaway business owner from Portsmouth has been handed a suspended prison sentence after authorities discovered he had spent a substantial tax bill on extravagant shopping instead of settling his dues with HM Revenue & Customs (HMRC). The case has drawn attention to the consequences of attempting to hide money owed to the government, and the importance of transparency and accountability in financial affairs.
Zhang Jin Chen, once at the helm of Fortune House, a Chinese takeaway that had operated in the city since 2012, faced sentencing at Portsmouth Crown Court last Friday. The court heard that, rather than using funds from the sale of his home to pay an overdue VAT bill, estimated at over £43,000, Chen squandered the proceeds on luxury items, including high-end electronics and designer goods.
Instead of resolving his obligations to HMRC, the 51-year-old made substantial withdrawals, including two separate transactions of £30,000 each in November 2020. Evidence showed that Chen also spent upwards of £3,500 on Apple products and nearly £900 at Burberry – treating himself mere days before Christmas. Over the span of a few months, he had reportedly spent in excess of £107,000, drawn from the profits of selling his property.
The offences took place following an HMRC inspection of the Fortune House business. Although Fortune House had been registered with the tax authority since February 2012, investigations revealed that the company should have also been registered for VAT from December of that year. It was following these findings that the sale of Chen’s Portsmouth residence came under scrutiny, revealing the questionable movement and use of funds.
By summer 2021, Chen declared bankruptcy, alleging that he possessed just £20 in his bank account and a further £100 in cash. In insolvency proceedings, he admitted to owing a considerable VAT sum of £43,876 but claimed to be incapable of meeting the debt. Under the terms of a five-year Bankruptcy Restrictions Undertaking, agreed in March 2022, Chen is now prevented from borrowing more than £500 without fully disclosing his status as a bankrupt individual. The undertaking also limits him from holding certain positions within public bodies and organisations.
The Insolvency Service, which took action against Chen, continues to seek the recovery of the lost funds. Mark Stephens, Chief Investigator at the Insolvency Service, highlighted the deliberate nature of Chen’s actions, stating: “Zhang Jin Chen had the funds available to pay HMRC more than what he owed, yet decided not to do so. Instead, he channelled large sums into luxury purchases, wilfully putting assets out of the reach of creditors, which is a criminal offence for those facing bankruptcy.”
Stephens emphasised the gravity of attempting to defraud public agencies and the broader impact such activity can have, noting: “Such actions are not just a matter of individual gain but deprive public resources and undermine the integrity of the financial system.”
The court handed Chen a 12-month custodial sentence, suspended for 18 months, and ordered him to complete 150 hours of unpaid work in the community, alongside participation in 10 days of rehabilitative activity. Legal observers point out that while suspended sentences like this allow individuals to remain in the community, they act as serious warnings and acknowledge the breach of public trust involved.
In cases like Chen’s, officials reiterate the legal responsibilities upon business owners to ensure taxes are paid, especially as the country grapples with closing tax gaps and ensuring fairness in the system. The Insolvency Service’s ongoing recovery efforts serve as a reminder that hiding assets to evade creditors, especially HMRC, can result in criminal sanctions and severe reputational damage.
The sentencing of Zhang Jin Chen underscores the government’s commitment to holding individuals to account and the significant penalties that can apply when public trust is breached. For many, the story may serve as a cautionary tale about the risks—both legal and ethical—of mishandling public funds and failing to meet obligations to HMRC.