A former accountant linked to Hexham has been ordered to repay more than £1.2m after a judge ruled that he benefited from a £3.3m tax fraud.
Kenneth Scott, 69, operated seven financial services companies through the Sunderland-based Willis Scott group. The businesses had offices in South Shields, Hexham, Newcastle and County Durham.
Newcastle Crown Court heard that Scott cheated the taxman over a seven-year period while spending money on luxury holidays and an Aston Martin worth £73,000. He was jailed for four years in April last year after admitting two charges of cheating the revenue between April 2014 and March 2021.
Scott was also banned from acting as a company director for 10 years.
Judge sets benefit from offending at more than £3.3m
The case returned to court on October 13 for a Proceeds of Crime Act application. The hearing was aimed at recovering part of the money and assets connected with Scott’s offending.
Judge Edward Bindloss ruled that Scott had benefited by £3,308,058.37. However, the court assessed the amount currently available to seize at £1,269,660.
That sum is expected to come from the sale of the businesses, the Aston Martin and other assets, including shares and Premium Bonds. Scott has three months to pay the amount.
If he fails to do so, he faces a further seven-and-a-half months in prison. Any outstanding amount will remain owed and can be recovered if he receives a future windfall.
Employees and clients affected by unpaid tax
The earlier sentencing hearing heard that 27 employees had tax and national insurance deducted from their wages, but the money was not passed to the Inland Revenue. Clients were also charged VAT even though the group was not registered for it, and the money was not handed to HMRC.
The unpaid employee deductions had consequences beyond the tax investigation. Workers were unable to claim benefits after they left their jobs, and their pensions could also be affected.
One worker spent six months in Glasgow because of her mother’s ill health. She was unable to claim money there that she would otherwise have been entitled to receive.
Luxury spending during the fraud period
The court heard that Scott spent £13,000 on a holiday in 2016/17, £23,000 on a holiday in 2017/18 and £44,000 on a holiday in 2018/19. He bought the Aston Martin in 2019.
When he was interviewed about the offences in 2021, Scott already had a £5,000 cruise booked. He acknowledged that his spending had been “a bit over the top”.
Despite the convictions and the financial recovery proceedings, references presented to the court described Scott, who had been in business for 40 years, as “courteous, kind and polite”. Others described him as a “good employer” who helped people in need.