Couple in court charged with £1m tax fraud at day nurseries

5''Michael Scott arrives at Southampton Crown Court
5''Michael Scott arrives at Southampton Crown Court
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A COUPLE fraudulently failed to hand over nearly £1m in tax and national insurance, a court heard.

Southampton Crown Court heard ex-husband and wife Michael Scott, 63, and Marina Scott, 60, of Grovebury, Locks Heath, were partners running Pixies Day Nursery in Locks Heath and Southampton at the time of the alleged fraud.

Marina Scott arrives at Southampton Crown Court

Marina Scott arrives at Southampton Crown Court

Prosecutor Robin Leach told the court: ‘This is a tax fraud and it’s alleged by the prosecution that both defendants in relation to businesses that they jointly operated together dishonestly failed to account to Her Majesty’s Revenue and Customs for National Insurance contributions and Pay As You Earn payments deducted by them on behalf of their staff.’

Some staff who were applying for Jobseekers’ Allowance were unable to do so, Mr Leach said.

One was told they had not been registered since leaving their previous job.

The offences are alleged to have taken place between April 2007 and November 2011.

Mr Leach said: ‘During this period the defendants employed in the region of about 60 members of staff at anyone one time in those businesses.

‘National Insurance contributions and PAYE were deducted from their wages in line in excess of £900,000.

‘We’re not dealing here with small sums.’

He added: ‘The sums of money they should have passed over to the revenue, they didn’t.’

Mr Leach told the jury how the pair had previously offered to pay HMRC £28,000 over payroll and staff benefit payment errors between 2000 and 2003.

At that time HMRC accepted the payment but wrote to the pair detailing their obligations over payroll.

Mr Leach added: ‘Subsequently and despite the fact that the defendants had been reminded of their obligation in accounting to the revenue in relation to PAYE and National Insurance contributions they deliberately ignored this obligation.’

The court heard staff at the nursery and another IT company run by the pair demanded P60 slips.

Administrative staff at the nursery were bombarded with emails from staff asking for this information and a ‘crisis meeting’ was eventually held, Mr Leach added.

He said Mr Scott claimed that the money had been paid to HMRC but in the wrong pot of money. Mr Leach said this was untrue.

Mrs Scott is charged with failing to disclose that National Insurance contributions or Pay as You Earn payments on behalf of staff had not been accounted for.

Mr Scott is accused of abusing his position as an employer in which he was expected to safeguard the financial interests of his employees, or HMRC, by failing to account for National Insurance contributions or Pay as You Earn payments.

HMRC criminal investigators arrested the pair on November 3 in 2012 after an investigation.

Both Mr and Mrs Scott deny the charges.

Judge Peter Henry adjourned the case until tomorrow.