UK businesses warned against fraudulent 'fresh air invoicing' strategy

An INSOLVENCY practitioner for an accountancy firm has warned of a growing trend of 'fresh air invoicing'.

Stephen Grant of Azets, an accountancy and advisory firm with offices in Poole and Blandford, announced rising instances of financially strained firms issuing invoices unrelated to any trading transaction.

The practice - coined 'fresh air invoicing' - deceives finance companies into advancing 70 per cent to 90 per cent of the falsely claimed invoice's value on the assumption that goods have been dispatched or services delivered.

Mr Grant said: "Our message to businesses in London is to seek professional advice immediately and not to contemplate fresh air invoicing to get out of a financial hole.

"It is fraud.

"We are seeing a number of businesses under pressure and strain at the minute, which may cause them to risk fresh air invoicing, often to pay front-of-queue creditors.

"We are seeing it in companies that have been going along perfectly normally, running a well-established business, but cash gets a bit tight, so they pretend that they’ve dispatched £10,000 worth of goods, send in the invoice to the invoice discounting company, get in £8,000 and think they will repay the £10,000 when they really do send out the goods.

"But this can spiral, gets out of hand, and it is fraudulent."