An accountant whose financial services group operated an office in Hexham has been ordered to repay more than £1.2 million after cheating the tax authorities out of more than £3.3 million.
Kenneth Scott, 71, of Fir Tree, Crook, County Durham, must pay £1,269,660 or face a potential seven-and-a-half-year prison term in default. The order was made at Newcastle Crown Court during a hearing under the Proceeds of Crime Act.
Scott was jailed for four years last year after admitting two charges of cheating the revenue. The offences covered the period from April 2014 to March 2021. He was also banned from being a company director for 10 years.
Companies operated across the North East
The court heard that Scott ran seven financial services companies across the North East. The group had offices in Newcastle, South Shields, Hexham and County Durham, and employed 27 people.
Tax and national insurance were deducted from employees’ wages but were not passed on to the Inland Revenue, according to the case. The court heard that this left former workers unable to claim benefits they might otherwise have been entitled to after losing their jobs.
One worker travelled to Glasgow for six months because of her mother’s ill health and was unable to claim money she would otherwise have received while she was there. The court also heard that the unpaid deductions could affect employees’ pensions.
Luxury spending detailed in court
The court found that Scott’s total benefit from the offending was £3,308,058. His available assets were assessed at £1,269,660, setting the amount he must repay.
During the seven-year fraud, Scott spent tens of thousands of pounds on luxury holidays and bought a £73,000 Aston Martin DB9. The holidays mentioned in court were worth £44,000, £23,000 and £13,000, with one trip alone costing £44,000.
When he was interviewed about the offences in 2021, Scott already had a £5,000 cruise booked for that year. The court was told he acknowledged that his spending had been excessive.
The companies also charged clients VAT despite not being registered for it, and the money was not handed to HM Revenue and Customs.
Jail sentence preceded repayment order
Scott had been in business for 40 years, and references presented to the court described him positively. However, the criminal case resulted in his four-year prison sentence, followed by the asset-recovery proceedings that led to the repayment order.
The order means Scott must pay the available sum or face further imprisonment in default. The case links Hexham to a wider North East financial services operation, while the reported impact extended to employees whose deductions were not transferred to the tax authorities.