Vaccine R&D ‘investment’ scam busted

burglar_art-555px A scheme that used bogus figures for investment in vaccine research to exploit a tax loophole has been exposed by HM Revenue and Customs (HMRC).

Matrix Securities sold a scheme to investors whereby they could gain tax relief at nearly twice their level of investment, using a tax break designed to encourage medical research.

However, HMRC exposed their investment figures as fraudulent and refused most of their tax relief claim, forcing the Matrix Group into administration.

The company raised £28m from 83 investors and borrowed another £86m from banks to fund research into vaccines against HIV, influenza and hepatitis B.

It claimed a first year trading loss of £193m and £77m tax relief, of which £50m would be paid to the investors.

However, HMRC established in a tribunal that only £14m had been spent on R&D and was therefore subject to tax relief.

Matrix Securities and other members of the Matrix Group have gone into administration – though another member, Matrix Asset Management, claims to have invested £107m in the development of a universal flu vaccine.

Clients who invested in the fraudulent scheme are claiming it was misrepresented to them.

David Gauke, Exchequer Secretary to the Treasury, commented that HMRC “will take decisive action to close down schemes with the sole purpose of avoiding paying tax.”