A former takeaway owner in Portsmouth has been ordered to repay more than £70,000 after withdrawing large sums of cash and purchasing luxury goods instead of settling significant tax debts.
Zhang Jin Chen, 52, was handed a confiscation order totalling £62,755 along with £8,000 in costs when he appeared at Portsmouth Crown Court on 13 February. The court ruled that the money must be paid within three months. If he fails to comply, Chen faces up to 18 months in prison. Even if jailed, the debt will remain payable.
For many small business owners across African, Caribbean, Asian and wider diaspora communities in the UK, this case is a stark reminder of the legal and financial responsibilities that come with running a business. While entrepreneurship remains a powerful pathway to economic mobility within diaspora communities, compliance with tax and insolvency laws is critical.
Chen previously operated Fortune House takeaway on Albert Road in Portsmouth as a sole trader. Although he registered the business with HM Revenue and Customs in February 2012, he failed to register it for VAT. When HMRC visited the premises in February 2020, officials found evidence that the business should have been VAT registered since December 2012, more than seven years earlier.
In July 2021, Chen applied for bankruptcy, claiming he was unable to repay his debts, including a substantial VAT bill. However, evidence later revealed that months before declaring bankruptcy, he had access to significant funds.
In October 2020, Chen and his ex-wife sold their jointly owned home in Portsmouth. Over the following weeks, he withdrew his share of the proceeds in cash, including two withdrawals of £30,000 in November 2020. He later claimed the funds were used to clear gambling debts but failed to provide credible evidence to support this explanation.
Financial records also showed that he spent more than £3,500 on Apple products in November and December 2020 and £880 at Burberry just days before Christmas. Chen claimed he no longer owned the items, but investigators found no reliable proof.
In May last year, Chen received a suspended sentence after being found guilty of fraudulently disposing of property as a bankrupt under the Insolvency Act 1986. The latest confiscation order ensures he remains liable for the money owed to HMRC, adjusted to reflect its current value.
Alexander Grierson, Head of Asset Recovery at the Insolvency Service, said Chen had sufficient funds to settle his tax obligations following the sale of his home but instead chose to withdraw large sums and make luxury purchases. He added that the Insolvency Service will continue working to protect creditors and ensure individuals who attempt to defraud the system face the full consequences.
Chen has also signed a five-year Bankruptcy Restrictions Undertaking, which runs until March 2027. Under these restrictions, he cannot borrow more than £500 without disclosing his bankrupt status and is barred from holding certain roles within public organisations.
For diaspora entrepreneurs, particularly those operating sole trader businesses, this case highlights the importance of VAT registration compliance, transparent financial reporting and proper handling of assets during insolvency proceedings. Financial missteps can escalate quickly into criminal matters, with long-lasting personal and professional consequences.
As small business growth continues to be a cornerstone of economic progress within Britain’s diverse communities, legal awareness and responsible financial management remain essential.
Chijos News will continue to provide diaspora-focused coverage on business regulation, financial accountability and entrepreneurship across the UK.
