Takeaway Owner Spent House Sale Proceeds on Luxury Goods While Owing £43,000 in VAT

A Portsmouth takeaway owner who splurged on Apple gadgets and Burberry fashion while owing tens of thousands in unpaid tax has narrowly avoided jail. Zhang Jin Chen, 51, ran Fortune House, a Chinese takeaway on Albert Road. While the business was registered with HMRC in 2012, he failed to register it for VAT despite trading above the threshold.

When HMRC visited the premises in February 2020, they discovered that VAT should have been paid since December 2012. By that point, Chen owed £43,876.

In October 2020—eight months after the HMRC visit—Chen and his then-wife sold their jointly owned house in Portsmouth. Chen received £107,550 from the sale, which could have cleared his tax debt more than twice over. Instead, he began withdrawing large amounts in cash, including two separate £30,000 withdrawals in November 2020.

He also spent over £3,500 on Apple products in November and December and made a further £880 purchase from Burberry just days before Christmas.

By July 2021, less than a year after spending the money, Chen applied for bankruptcy. In his declaration, he claimed to have just £20 in his bank account and £100 in cash.

However, an investigation by the Insolvency Service concluded that Chen had deliberately concealed assets and fraudulently disposed of property to avoid repaying his debts—a criminal offence under the Insolvency Act 1986.

On 16 May 2025, Portsmouth Crown Court handed Chen a 12-month prison sentence, suspended for 18 months. He was also ordered to complete 150 hours of unpaid work and 10 days of rehabilitation activity.

Mark Stephens, Chief Investigator at the Insolvency Service, said:

“Zhang Jin Chen had the money available to pay the VAT he owed to HMRC twice after the sale of his house but chose not to do so. Instead, he withdrew huge sums of money in cash and purchased from Burberry and Apple.

“Individuals who are declared bankrupt commit a criminal offence when they put assets out of the reach of creditors in the five years leading up to their bankruptcy. Chen intended to conceal his affairs and defraud HMRC so he could be more than £100,000 better off.”

In March 2022, Chen signed a five-year bankruptcy restrictions undertaking, preventing him from taking on specific roles in public organisations or borrowing more than £500 without declaring his bankruptcy status.

The Insolvency Service seeks to recover the lost funds under the Proceeds of Crime Act 2002.

The case forms part of HMRC’s broader crackdown on tax evasion, with authorities continuing to pursue individuals who attempt to avoid their financial responsibilities.