A British man who faced a crippling tax bill in Germany as a result of identity fraud has finally won his case with the authorities.
In a victory for the Telegraph, which first ran the story on October 19, the German tax authorities have confirmed that they are no longer pursuing unpaid VAT totalling more than £110,000 from Adrian Richards.
Mr Richards, 47, has battled with the authorities since 2010 over the unpaid tax bill, which resulted from an alarming case of identity fraud. "Hopefully, this is the end of it," Mr Richards said. "It is a great relief."
The project manager at a construction firm in London had his passport stolen in 2003. Earlier this year, he faced a £34,000 court order after his passport, with a different photograph, was used to set up a communications company in the Isle of Man that was fined for breaching codes of practice.
The legal process following the court order uncovered the doctored passport, which led Mr Richards to believe his battle over unpaid VAT in Germany was also the result of identity fraud. He wrote to HM Revenue & Customs in July to explain the case but continued to receive demands for the unpaid tax.
Experts described Mr Richards's case of identity fraud – where a criminal takes someone's details and uses them to make a purchase or obtain credit – as one of the worst they had encountered.
Jim Gee, director of counter fraud services at accountancy firm BDO, said: "This case shows three things. First, the positive power of the press – without the Telegraph's intervention I have no doubt that it would not have been resolved.
"Second, the importance of getting specialist advice when faced with such a problem. And, finally, it shows the seriousness of identity fraud and the importance of the Government taking it seriously and standing up for British citizens."
According to figures from Cifas, a British fraud database, 123,600 cases of identity fraud were reported in 2012, up from 77,500 in 2007. Identity fraud now accounts for more than half of all fraud in Britain.
It was understood that Mr Richards owed more than £130,000 to German tax authorities. HMRC has since admitted this was its error and confirmed the correct figure was £113,028.
Following our article, the British tax office wrote to the German tax authorities in October asking them to close the case after "further investigations" suggested that they were pursuing the wrong person. In a letter seen by the Telegraph, an HMRC official wrote: "Further investigations in our office suggest that we are pursuing the wrong person for the above debt so I have written to Germany asking them to agree that I can close this case."
The German tax authorities swiftly dropped the case, accepting Mr Richards was a victim of identity theft.
Mr Richards said: "It is very frustrating that we have had to go through all this. It took the interest of a number of parties for [HMRC] to take a view on the situation. As soon as it stepped in, the German authorities withdrew their claim." He is now considering a formal complaint.
Cathy Richards, 51, said: "Adrian is very organised and has folders dating back to when this first started. It just got progressively more difficult.
"Despite [HMRC] saying they couldn’t intervene, they obviously have. It has cost us time, money and stress. You wonder if it happened to someone else, would they have been able to afford a solicitor."
An HMRC spokesman said: "Our process is that we send a copy of the dispute to the member state and ask if it is valid or not. We cannot get involved in the detail of whether or not the tax is correctly applied as per our agreement with Germany."