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Hampshire nursery boss jailed for tax fraud

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Hampshire nursery boss jailed for tax fraud

The co-owner of a Hampshire chain of children’s nurseries who stole £950,000 from his employees - through money deducted from their salaries as tax and National Insurance - has been jailed for five and a half years.

Michael Scott, 63, from Locks Heath, cheated more than 180 employees by deducting Pay As You Earn (PAYE) Income Tax and National Insurance Contributions (NICs) from the salaries of his workers, but then failed to declare and pay the money to HM Revenue and Customs (HMRC). He also failed to declare and pay employer National Insurance.

HMRC began to investigate after former employees raised concerns about gaps in their Income Tax and National Insurance records. The investigation revealed that he had been stealing from his employees for more than four and a half years, between April 2007 and November 2011.

John Cooper, HMRC’s Assistant Director of Criminal Investigation, said:

“Michael Scott brazenly robbed his employees and lined his own pockets at the expense of the wider taxpaying public. Tax was deducted and shown on payslips but the money was not handed over to HMRC, leading to gaps in employees’ tax records.

“HMRC is working with the victims of this fraud to correct their tax and contributions records. People with information about suspected fraud can contact the Tax Evasion Hotline on 0800 788 887.”

Scott, who owns a vast property portfolio and a private aircraft, pleaded not guilty at Southampton Crown Court on 12 November 2013 and was found guilty by a jury on 17 June 2015. He was remanded in custody until 18 June 2015 when he was jailed for five and a half years. He was sentenced in relation to a £800,000 net figure.

Upon sentencing His Honour Judge Henry said:

“You were involved in fraud on a large scale for a number of years. As an employer it was your job to deduct taxes from your staff and to provide them to the Revenue.

“Fraud against the Revenue goes to the heart of society, but millions pay their taxes year in year out. This is a cheat of your fellow citizens, but the group you put at substantial risk is your staff. Your actions put in jeopardy their rights and entitlements.”

He added that “the quality of nursery care was good.”

Confiscation will be sought to recover the proceeds of his crimes.

Notes for editors

1.Michael Everard SCOTT (05.04.52), a children’s nursery proprietor of Grovebury, Locks Heath, Hampshire. He is known to have used the alias Stuart Wilson. He was jailed for five and a half years and suspended from being a company director for ten years.

2.Michael Scott was charged with offences contrary to section 1 of the Fraud Act 2006, while operating as PiXieS Day Nursery and Pixies Too Limited – with two branches in Locks Road, Locks Heath, Hampshire, and Pixies Tree Limited in Portsmouth Road, Woolston, Southampton, Hampshire. Businesses with similar names are not linked to this investigation.

3.Michael Scott was charged on 12 July 2013 in breach of section 4 of the Act, that he dishonestly and intending to make a gain for himself or another, or to cause loss to another, abused his position as an employer by failing to account for NICs and / or PAYE payments on behalf of staff to HMRC.

4.HMRC criminal investigators arrested Michael Scott and his ex-wife in Locks Heath, Southampton, on 3 November 2012 on suspicion of Fraud Act offences. His ex-wife was acquitted during the trial in June 2015 and the case against her dropped.

5.Around 60 staff were employed at any one time.

6.A photograph is available on HMRC’s Flickr channel www.flickr.com/hmrcgovuk.

7.People with concerns about gaps in their contribution history can contact the PAYE helpline on 0300 200 3401. HMRC is assisting the victims in this case.

8.Anyone with information about tax fraud can report it online atwww.hmrc.gov.uk/reportingfraud/online.htm

9.Follow HMRC on Twitter @HMRCgovuk

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Issued by HM Revenue & Customs Press Office

HM Revenue & Customs (HMRC) is the UK’s tax authority.

HMRC is responsible for making sure that the money is available to fund the UK’s public services and for helping families and individuals with targeted financial support.

Press contacts

HMRC Press Office

HMRC Press Office

Press contact 03000 585018

HMRC Regional Press Officer - South West

Press Officer Hampshire, Isle of Wight, Dorset, Wiltshire, Gloucestershire, Devon, Cornwall, Bristol & Somerset 03000 518067

Related content

HM Revenue & Customs (HMRC) is the UK’s tax authority

HMRC is responsible for making sure that the money is available to fund the UK’s public services and for helping families and individuals with targeted financial support.

HM Revenue & Customs (HMRC)
100 Parliament St
SW1A 2BQ London