A MAN who avoided paying more than £600,000 in tax and national insurance has been jailed for five years.
Stephen Maxwell, 53, became involved in an offshore tax avoidance scheme and failed to pay more than £600,000 over a nine-year period.
Maxwell, of Wallach Court, Dalbeattie, was found guilty after a six-week trial at Kirkcudbright Sheriff Court of failing to pay the contributions.
He had originally been charged with failing to make payments totalling £1.7 million.
The IT consultant and contractor hid the money from Her Majesty's Revenue and Customs (HMRC) by having his fees paid into companies – of which he was a hidden beneficiary – registered in Gibraltar and the Isle of Man.
His agent told Sheriff Kenneth Robb that it was Maxwell's accountant and financial advisers that had brought him into this offshore scheme which was the basis for the indictment.
Maxwell was found guilty on charges of pretending to HMRC that he had no taxable income over a nine-year period to May 2008. He was convicted by the jury of forming a fraudulent scheme to evade income tax and National Insurance payments totalling £635,015 to HMRC by failing to reveal earnings of almost £2m.
During the trial it was stated that Maxwell was earning £800 a day working as an information technology consultant for JP Morgan Chase Bank and Deutsche Bank.
He was originally charged with avoiding payments of more than £1.7m but this amount was reduced and charges against his wife were dropped.
Maxwell, who was said to own offshore companies in the Isle of Man and Gibraltar, was also accused of putting assets beyond the reach of creditors, in particular HMRC, by purchasing Barncailzie Hall at Springholm, near Castle Douglas.
His agent, advocate Andrew Murphy said the scheme was not Maxwell's invention but he had persisted in it for a number of years. Mr Murphy added: "Even to tax experts, it is a law which is complex. His error was maybe, at an early stage, he did not seek sound advice about the legality of the scheme and this was compounded by not being up-front with the income tax and bankruptcy.
"He made no effort whatsoever to make payment and once into the scheme he did not seek a way of finding a way out. He blindly carried on, hoping not to be discovered.
"He was obsessed with computers and it seems he had a high talent which was probably wasted. He revelled in solving computer problems and worked seven days a week and all his holidays."
Mr Murphy said the scheme had not brought Maxwell financial rewards and he had lost his house in England and his house and estate in Stewartry.
Sheriff Robb said he did not agree Maxwell had not harmed anyone and added that, in this age of constraint, £635,000 was a lot of money and would have helped the public purse. He told Maxwell: "You have enjoyed the fruits of your labour and the tax that you should have paid. The tree may be bare but you used the fruits over many years."
Maxwell's sentence was back-dated to March and a Proceeds of Crime hearing has been adjourned until August.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article