UK court slaps £1.5m fine on Altaf Hussain, other MQM leaders

FOOLS_NIGHTMARE · Jul 8, 2023

Northampton County Court announces verdict on HMRC's petition.
Defendants include MQM founder Altaf Hussain, Tariq Mir, others.
They deny any wrongdoing or involvement in tax evasion.

LONDON: A court has issued a judgment against the current and former senior Muttahida Qaumi Movement (MQM) leadership — including Altaf Hussain and Syed Tariq Mir — for nonpayment of nearly £1.5 million to the UK government’s tax and income department — known as His Majesty’s Revenue and Customs (HMRC).

According to information available with The News, the judgment in default has been issued by Northampton County Court’s Judge Henley on an application by the HMRC in its long-running civil tax and income dispute with the MQM leadership.

The judgment has been issued against the MQM leader and founder Hussain, Mir, Iftikhar Ahmed, and Mohammed Kalimullah Syed in the case brought before the court by the HMRC.

The default judgment said it is ordered that “there be a judgement in default of a defence” against Mir, Hussain, and Kalimullah for the total sum of £1,476,406.06. The claim against Iftikhar Hussain, the second defendant, proceeds as a contested claim, said the judgment.

The judgment said that the order has been made on the application of a party without notice, therefore, MQM defendants have the right to apply to have the order set aside, varied, or stayed.

Hussain, Mir, and others deny any wrongdoing and the judgment is not an imposition of guilt or criminality as it’s a civil case dating back several years.

The HMRC started the case of income tax evasion during the money-laundering investigation against Hussain and colleagues.

After nearly four years of investigation, Scotland Yard found no evidence of money laundering and ended its investigation against Hussain and others, but at the same time, the investigators found that the MQM had received donations from Pakistan and all over the world — seen as income by HMRC — and that there were several people working at the MQM International Secretariat who were being paid regular monthly wages – some very handsomely.

The case centres around the non-payment of Pay As You Earn ( PAYE ) — a system an employer uses to take Income Tax and National Insurance contributions before they pay wages.

The HMRC said that the MQM should have paid tax on the income and donations it received, but the MQM said it was a non-incorporated body and didn’t need to pay income tax.

This is a matter which also became one of the reasons for disputes between Hussain and Mir and the late Muhammad Anwar, who both handled the MQM finances for over a decade.

The UK government’s HMR had determined that the MQM leaders had failed to pay nearly £2 million to the national exchequer over a period of 20 years for evading taxes over large earnings running into millions of Pounds, based mainly on donations received from MQM supporters including from Pakistan.

Three years ago, the UK govt’s tax department fined Hussain’s MQM for £2 million over income tax evasion in the same case. The MQM leader has contested the case and continues to plead he is not responsible for the negligence of his colleagues who were supposed to keep the accounting books straight and in line with the UK govt requirements on taxes and incomes.

The UK govt tax investigation is based on income, payments and National Insurance contributions which were allegedly not paid starting 1995 to 2015.

The MQM founder has contested the civil proceedings stating that he never earned any money as he has never been employed and was not obliged to pay income tax to HMRC.

He has told the investigators that he has been managing his life through donations given by loyalists from Pakistan and abroad. As head of a political party he was entrusted to use those funds to maintain his lifestyle – free of taxes.

Anwar and Mir are qualified accountants and were responsible for the financial and tax matters of the party and founder Hussain, according to MQM London. The party says the duo had advised Hussain that he didn’t need to pay income tax as the MQM-London was not a registered and incorporated body and there was no need to pay income tax.

Both Anwar and Mir were named in the HMRC investigation and Hussain’s lawyers have told HMRC that the blame for not paying the arrears and dues should rest with them as he personally didn’t handle the financial matters.

Muhammad Anwar died three years ago and his name was removed from the investigation after his death.

When contacted by The News, Mir said that he had nothing to do with the taxation matters of the MQM and Mir will be setting out his case before the HMRC.

Mir said he dealt with MQM’s finances till 2012 and advised Hussain on these matters professionally.

“I hired a professional accountants firm which looked after the financial matters of the MQM and it was not me who dealt with these matters. I gave advice to the MQM founder but my advice in many cases including the taxation issues was not paid attention to.

I quit MQM active politics in 2014 over differences and worked at the MQM office part-time till about 2016 and then completely cut off from the party leadership," Mir said.

“I have instructed my lawyers to engage with the HMRC and explain my position," he added.