Dalbeattie man who failed to pay £600,000 in tax 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, who was found guilty after a six-week trial at Kirkcudbright Sheriff Court of failing to pay the contributions, had originally been charged with failing to make payments totalling £1.7 million.

The IT consultant and contractor hid the money from Revenue & Customs over a nine-year period with his fees for his services from the bank being 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 Maxwell’s accountant and financial advisers had brought him into the offshore scheme which was the basis for the indictment.

Maxwell was found guilty on charges of pretending to Her Majesty’s Revenue and Customs 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. 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.

“Event 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 said.

Mr Murphy added: “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 that the scheme had not brought Mr Maxwell financial rewards and all had been lost, his house in England and his house and estate in the Stewartry.

Sheriff Robb said he did not agree with Maxwell’s agent that he had not harmed anyone and said 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 Proceeds of Crime hearing has been adjourned until August.