City council secures conviction for small business rate relief fraud

The City of York Council has brought what is thought to be one of the first prosecutions specifically for small business rate relief fraud.

Yigit Ceyhan, 27 of Boroughbridge Road, York, had provided a forged lease agreement to the council, claiming that the landlord – not himself - was responsible for the business rates at a barber shop he ran.

He evaded liability at the property and later applied for small business rate relief at another business he ran, a fish and chip shop, on the basis that it was the only business premises that he occupied.

City of York said this relief was initially granted, giving Ceyhan a zero charge on his business rates at that property.

Small business rate relief is a discount of up to 100% that can be granted to certain businesses. To qualify, the applicant must have only one business property, although there are some exceptions to this.

After concerns were raised by a council officer, an investigation was conducted by Veritau, York’s fraud investigation service.

The investigation found that Ceyhan had been occupying and running the barber shop for four years and that the lease agreement provided to the council was false. He was found not to be entitled to relief at the fish and chip shop because he occupied and was liable at another business property.

The council said Ceyhan was interviewed under caution during which he declined to comment.

At York Crown Court on Tuesday 12 March 2018, he pleaded guilty to a charge of perverting the course of justice.

Ceyhan was sentenced this week (9 April) to eight months’ imprisonment suspended for two years, was ordered to do 250 hours of unpaid work and to pay prosecution costs of £1,382.

His Honour Judge Batty said: “By your dishonest behaviour you avoided the rates for a considerable period of time. City of York Council was out of pocket over £4,000, it was entitled to that money and properly prosecuted you for perverting the course of justice for your actions.”

The judge gave a suspended sentence based on Ceyhan’s previous good character, his work ethic and the fact that he was recently the victim of an armed robbery at the barber shop.

Cllr Ian Gillies, leader of City of York Council with portfolio for finance and performance, said: “This is one if not the first business rate fraud prosecution in the country and an excellent result showing that we will not tolerate fraud against the public purse.

“Fraudulently claiming discounts reduces funding available for public services and all who live and work in the city. Evading liability on business properties is a serious offence that can lead to a criminal record, fines or even a custodial sentence.