TAX FRAUD: Court hears UK-based Zimbabwean businessman sent part of £58m loot to SA lover

Ncube, a certified chartered accountant, is accused by the liquidators of his UK company Unified Payroll Limited (UPL) of using two intermediary firms, Applemed UK and Applemed SA, to channel funds to Mwakurudza.

He registered UPL in the UK in 2015 and was its founder, sole director and sole shareholder, with the company operating as an employment agency employing mostly healthcare workers and supplying them to other employment agencies, who would then link them to employers, who were primarily the UK’s National Healthcare Service Trusts.

Mwakurudza was employed as manager: compliance by Applemed SA, which is linked to UPL. The payment trail of the funds sought by UPL’s liquidators in the UK shows that they flowed from the company to Applemed UK, then Applemed SA and then into Mwakurudza’s bank account.

UPL’s UK liquidators have stated that Ncube is liable for just over £40m in respect of national insurance contributions (NICs) and pay-as-you-earn (PAYE) and £17m in respect of value-added tax (VAT).

The fraud was discovered after the UK closed a tax loophole which enabled tax avoidance through the use of personal service companies by health and care workers.

“This affected the obligations of umbrella companies such as UPL,” reads papers before the court.

“UPL received the employee’s gross remuneration from the employer, typically an NHS Trust. UPL was obliged in terms of the new tax legislation to deduct PAYE and NICS (national insurance) from an employee’s remittance, before paying the balance over to the employee.

“UPL was then responsible for paying the deducted PAYE and NICS to the HMRC. But UPL did not always do so. It retained monies it received on behalf of the employees, and which did not belong to it, but which were owed to the HMRC.”

Further;

“In order to conceal that UPL had not made the tax deductions, Ncube and the respondent manufactured false pay slips which reflected that the worker was on the PAYE scheme whereas in fact the worker had contracted through a PSC and was on the Ltd Co. scheme. The false pay slips reflected that PAYE and NICs had been deducted which was a misrepresentation of the true position.”

The liquidators also accuse Ncube of using Mwakurudza to conceal the flow of monies he unlawfully misappropriated from UPL to evade the company’s creditors, with their relationship enabling him to do so without the need for any paper trail beyond payments and withdrawals.

They allege that Mwakurudza committed several acts of insolvency and that between December 2017 and January 2022 she made payments from her bank account exceeding R43m.

In her defence, she did not dispute that the payments were made but insisted that they were made before UPL was liquidated, and that no creditors had claimed against her.

However, Judge Manoim concluded that the payments must have been dispositions made in contravention of the Insolvency Act, which states that a debtor commits an act of insolvency by making or attempting to make any disposition of any of their property which has, or would have, the effect of prejudicing creditors or preferring one creditor above another.

He found that the R43m that was disbursed from her bank account which would constitute a self-standing ground of insolvency in terms of the Insolvency Act.

The judge noted that her assets were valued at R25m while her liabilities exceeded R34.7m and she had outstanding debt of a bond on her property.