Northern Ireland

China robustly defends its citizens and businesses following revelation thousands of addresses in north used in alleged widespread VAT fraud

The Chinese Embassy responded to Irish News reports with “great indignation” at “malicious defamation”

The Chinese Consulate in south Belfast where residents say recent work around the perimeter is not in keeping with the character of the area. Picture by Mal McCann
The Chinese Consulate in south Belfast. Picture by Mal McCann

China has robustly defended its citizens and companies after it emerged that thousands of addresses in Northern Ireland are being used by firms linked to the country.

Taoiseach Leo Varadkar welcomed Chinese premier Li Qiang to Farmleigh House in Dublin on Wednesday
Taoiseach Leo Varadkar welcomed Chinese premier Li Qiang to Farmleigh House in Dublin earlier this month (Niall Carson/PA)

In a statement in response to articles and questions from this publication, the embassy in London stated: “We have noticed relevant reports and express great indignation and firm opposition to malicious defamation inconsistent with the facts related to China.”

More than 5,000 companies were formed over the last year by Chinese nationals using addresses in Northern Ireland where the home, business owners or residents are believed to have no connection to the companies. More than 100 online trading firms were registered in recent weeks alone.

Letters have dropped into houses and businesses from the HMRC, Companies House congratulating the new director and company, and even solicitations from UK-registered banks.

In its statement in response, the embassy said: “The Chinese government cracks down hard on all kinds of tax evasion and required overseas Chinese companies to strictly abide by local laws and regulations.

“It must be pointed out that China-UK economic and trade cooperation should adhere to the principle of equality and mutual benefit.

“Any abuse of national laws and regulations and malicious suppression of Chinese companies will only affect the confidence of Chinese companies in investing in the UK.

“We hope the British side can provide Chinese enterprises with a fair, just and non-discriminatory business environment.”

Neither the London embassy nor the Belfast consulate would clarify whether China was defending Chinese citizens or criticising the reporting.

Graham Barrow believes the registrations of hundreds of companies in the north is part of widespread VAT fraud
Fraud expert Graham Barrow

Fraud expert Graham Barrow, who has worked with The Irish News to highlight the phenomenon, said: “If companies register to fake or stolen addresses, there is nothing ‘malicious’ in pointing this out and it certainly isn’t ‘suppression of Chinese companies’ as the same judgment would be applied whatever the nationality.

“It just happens to be Chinese in this case and they are making false statements on their incorporation documents. That’s simply a fact.”

Amazon has been fined £27m in France for what the country’s data watchdog called ‘excessive’ surveillance of its warehouse workers
Goods linked to companies with addresses in the north are selling on Amazon and other platforms (Niall Carson/PA)

Companies using addresses across the north, some fictitious, are trading on sites like Amazon in a suspected type of VAT fraud, said Mr Barrow.

Chinese nationals are listed as directors. The publicly available information also reveals that while many claim to be involved in online trading of goods, others are listed as selling machinery and other heavier products.

One homeowner was surprised to find her west Belfast home was listed as being involved in the possible sale of aircraft and ships.

Evidence suggests an organised targeting of the north, possibly by many groups and individuals. This evidence includes the multiple wrong spelling of street names, the use of a particular address or street by multiple companies and the timing of the filings.

The owners of homes have heavily criticised existing legislation that makes it simple for anyone to register a company without checks. All a person needs to do is to register online and pay £12.

“From March, we will use our new powers to act more quickly if people tell us their personal information has been used on the register without their consent,” a Companies House spokesman said, referring to a new economic crime law.