Green Jellyfish: the story of a multi-million pound R&D Tax Credit scam
Tax lawyer Dan Neidle has estimated that R&D Tax Credit advisory firm Green Jellyfish submitted at least ￡100 million of fraudulent R&D claims in little over 3 years.
But how did Green Jellyfish scale their R&D Tax Credit business so fast? And more importantly, how did they cover their tracks for so long?
Paul Rosser has examined the practices of Green Jellyfish for over a year and in this exclusive guest article he explains how the Green Jellyfish empire expanded to include over 20 connected companies.
Guest article written by Paul Rosser
Formed in 2019, Green Jellyfish was the brainchild of Scott Herd and Sotiris “Steve” Christophi.?
If their reasoning was that the R&D advisory market was an easy way to make a lot of money then they were correct as Green Jellyfish, along with a connected network of other R&D advisory companies, made over ￡40 million in fees in just 3 years .?
It might seem strange that a new R&D advisor could successfully enter an already saturated advisory market but the ingenious idea of focusing on companies no other advisor would want (ie ones that are highly unlikely to qualify for R&D tax relief) would ensure that a supply of prospects would remain plentiful.
When Green Jellyfish was formed, Christophi was already the owner of Aston Shaw Limited, an established accountancy practice he had purchased several years earlier. Whilst on paper it would look like he wasn’t an owner or director at Green Jellyfish, it’s been reported by several people that he acted just like an owner would and he worked very closely with Herd to build the company.
As well as Aston Shaw Limited, Christophi also owned some care homes which could be why this was an easy industry for Green Jellyfish to target.? Although highly unlikely to qualify for the relief , HMRC’s very low levels of claim checking would have given Christophi and Herd the confidence that they could submit hundreds, if not thousands, of R&D claims for care homes with very little chance of anyone at HMRC noticing.
In 2020, Green Jellyfish started to aggressively market to care homes by cold calling, placing adverts in care association publications and even managing to get on some care associations’ “approved supplier” lists.
The timing couldn’t have been better as this was just as Covid started and so HMRC resources were even more stretched than normal, providing the perfect environment for their scheme to play out as they hoped.
Once some care homes started to receive their promised repayment from HMRC (minus a 35% fee paid to Green Jellyfish), word spread like wildfire that it wasn’t a scam, and that Green Jellyfish were a reputable advisor, opening the floodgates for more care homes interested in claiming.
What none of the care home owners realised, and Green Jellyfish didn’t make clear, is that HMRC has a “process and pay first, check later” policy when it comes to lots of tax reliefs, including R&D tax relief.
Whilst care home owners believed that receiving a payment from HMRC meant that their R&D claim had been checked and approved, it was more likely that no-one at HMRC had even looked at it, as they were busy trying to deal with Covid and all the various support schemes the government was rolling out.
The scam was working, in fact, it was working so well that several other companies were setup, mostly owned by Herd, as Christophi was still being very careful to avoid being seen on paper as being connected to Green Jellyfish, or any of the other companies set up seemingly to facilitate mass fraud of the R&D tax relief system.
Kirby & Haslam Limited was formed which actually did list Christophi as the sole director and shareholder, but which he would claim was an independent accountancy practice to Green Jellyfish, more on that later.
In 2022 Dan Robinson’s name started appearing and he became the primary owner of several of these newly formed companies, as well as the original Green Jellyfish company (which was renamed in 2023 from Green Jellyfish Limited to GJ2020 Limited).
Several other directors were also then installed into the group of companies, further obscuring the fact that Herd and Christophi were in charge and that behind the scenes they were very much still running the show.
These directors included Lee Stuart Parker, Nicola Ann Colk, and Jason McKenna.
By the start of 2024, a network of over 20 companies had been created by Christophi and Herd, all connected via either common ownership or common directors.
At the end of 2022, and in response to an article in The Times , HMRC decided to do something about the R&D advisory industry.? Due to its poor policing of the scheme, several large and dishonest advisors had been allowed to generate hundreds of millions of pounds in fees from fraudulent R&D claims, not least Green Jellyfish et al.
HMRC began with a random enquiry program into R&D claims filed in the past few years, to gauge the size of the problem and also to gather vital information with regards to which advisors might be behind most of the invalid claims being submitted.
Since then, HMRC has introduced several other measures designed to prevent the widespread abuse of the R&D tax relief system, which put Green Jellyfish and its connected companies firmly in its crosshairs.
Hundreds of current and ex-Green Jellyfish clients were notified by HMRC that it was investigating the R&D claims which had been compiled on their behalf by Green Jellyfish.?
The majority were found to be invalid, resulting in the company owner needing to return all of the benefit they had received, including anything lost to Green Jellyfish in terms of fees.
Whilst this might have come as a shock to those who knowingly used Green Jellyfish, or one of their connected companies, it was nothing compared to those company owners who didn’t even know a claim had been submitted on their behalf.
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In October 2022 a company called Procare Advisory Group Limited was renamed to Complete Care Advisory Group Limited and Dan Robinson was installed as the Director and majority shareholder.
Impact Business Partnerships Limited was also formed and several of the network of companies were transferred to its control, with Dan Robinson being shown, on paper at least, as the owner/director.
Complete Care Advisory Group didn’t market R&D advisory services as much as the other network members and instead claimed to offer a range of services specifically for care homes, such as help with Care Quality Commission (CQC) ratings, accountancy services, capital allowance claims and energy price reviews.??
Subsequently, a whole new range of care homes were targeted by Complete Care Advisory Group, often offering some very good rates when compared to other providers in the marketplace.
Due to HMRC’s increased scrutiny of R&D claims from sectors highly unlikely to qualify, such as the care home industry, it is not surprising that a lot of claims submitted on behalf of Complete Care Advisory Group clients were chosen for compliance check by HMRC.? What is surprising is that a number of these clients didn’t even know a claim had been submitted in their name and that large sums of money had been sent to them via Complete Care Advisory Group’s bank account, where those sums remained.
It is not known how many companies were affected by this scam but judging by the examples seen, it would have been pretty lucrative even on a small scale.
The next step is where Christophi’s firm Kirby & Haslam make an appearance.
As the number of compliance checks opened into claims made by Complete Care Advisory Group and the other companies within its network rose, claimants navigating a compliance check are introduced to Kirby & Haslam as an ‘independent’ expert but we can see that this is far from the truth.
For those who know what to look for, the links between the companies isn’t too difficult to find, especially as they are trading from the same building but why would the claimants who trusted Green Jellyfish, Complete Care Advisory and the other companies in the network even think to look??
In most cases, it seems that Kirby & Haslam would be tasked with creating a narrative that would support the company’s claim for R&D tax relief in order to satisfy the compliance check – a task which should have been undertaken, and undertaken honestly, before any claim was ever made.
As mentioned a number of times in this article, care homes are highly unlikely to qualify so many care home owners found themselves required to pay back all the funds they had received from HMRC, including the element paid to whichever R&D advisory service they had used and often not being able to recover these fees, even though the service had been sold to them as on a contingent fee arrangement.
In 2024 things really started to unravel.? Due to HMRC’s very focused compliance measures against Green Jellyfish, and all the other companies within this network, Herd and Christophi suddenly found their cashflow was drying up fast.
There were also some very negative reviews appearing online and much as they tried to get them removed, they were finding this difficult, and so more and more people were finding out that their promise of “risk free money from HMRC” was a lie.
Desperate to continue their lucrative operation, Herd and Christophi circulated a fake narrative about a smear campaign and various people plotting against them, which was fed to their employees and the outside world via social media.?
Following this, more changes were made to the structure of the group, diluting the connection to Christophi, including removing him as the owner of Morgan Woods Limited – something which tied him very much into the Green Jellyfish group.
In June 2024, with their working capital fast running out, several of the Green Jellyfish companies folded, making around 100 people redundant. This was followed at the end of July by the sudden announcement that Impact Business Partnerships Limited would be going into liquidation, making a further 50 or so people redundant, without redundancy pay or even their salary payment for July.
Interestingly enough, at the start of July, just a few weeks before Impact Business Partnerships Limited went into liquidation, there were lots of share transfers recorded on Companies House which meant that some previously unknown people suddenly became owners of companies in the group, including:
Some of these people have been identified via their social media accounts and appear to be contacts or friends of Christophi and may find themselves facing charges for the fraudulent practices undertaken by the companies, whether they were aware of them or not.
Guest article written by Paul Rosser
Paul Rosser has been in the R&D Tax Credit field since 2010 and is a Director at Research & Development Consulting Ltd.
Disclaimer: this article uses verifiable testimonies and information from ex-employees and clients of Green Jellyfish and associated companies. Additional information has been provided by tax lawyer Dan Neidle in his series of articles detailing the business practices of Green Jellyfish (available here ).
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Managing Director at Maquina Technical Services ltd.
1 周We currently have a tax claim with these guys and I am late to the party with this info, can anyone help us with some advice? I am literally in the pitch black
?? They did a great job for me last year and the previous year. Having heard little on this years' RDEC application I can now see why all their phone lines are down. Horrified.
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2 个月My only comment about this is that were this some king of benefit fraud there would be all sorts of outrage about people sponging off the tax payers money. This article reads as if itt’s author not only admires the scope and deviousness of the wide scale fraud involved but takes pleasure in reviewing the case. The perpetrators are parasites nothing more nothing less.
R&D Tax Quality Assurance
2 个月Thank you Paul for your hard work to report this in such clear detail. These criminals have exploited a generous system designed to support UK innovation and growth, through their greed now jeopardising the relief for genuine claimants investing in R&D.
Commercial Director at Arroway Limited
2 个月We used them. I had a company built around Anaerobic Digestion (Green Biogas) sites that we serviced. I developed a LoRaWAN monitoring solution to measure environmental effects of the chemical releases from these sites. It wasn't being done, and we developed the tech to do this, on remote sites. After being paid by HMRC, we later received "fraud notices" from them, claiming we had misled and had claimed falsely. I was so confident in our tech that we fought back, and this inevitably was placed in the hands of Kirby and Hallam. I still have all the emails! In the end we paid it all back - rather than be in a precarious financial position at some later date. Good article. We had to pay back 5-6 figure sums because of the over-scrutinisation and felt like we were treated like criminals. I closed the company last year, but still own an develop the tech because it was (and will be) a vaild technical advance be able to measure / detect stimuli in environments where normal WiFi / 4G was inadequate (farms / rural spaces away from normal high-bandwidth comms!)