Bus director admits tax fraud scheme woth more than £10,000

Oct 6 2011 Hamilton Advertiser

A FORMER director at a Lanarkshire bus firm that folded last year has admitted running a tax fraud scheme.

Peter McKenna (36) defrauded the Inland Revenue of more than £10,000 when he worked at McKindless Bus Company, based in Newmains, over a 20-month period.

The businessman racked up the money by inducing employees to accept part of their weekly wage without tax and national insurance deductions.

The scheme meant that, due to many of the workers’ hours going undeclared on tax return forms, the McKindless firm avoided paying a sum of Income Tax and national insurance contributions to the tax man.

As a result of McKenna’s actions, workers who later tried to sign on for benefits after the company folded in 2010 were told they were not eligible due to discrepancies in their tax and national insurance status.

McKenna, of Wishaw, originally faced charges of a fraudulent scheme worth more than £100,000, but he pleaded guilty to an amended charge.

His co-accused, Lanark woman Jennifer McKindless Bell (37), pleaded not guilty to fraud, which was accepted by prosecutors.

McKenna pleaded guilty to committing the fraud at the firm’s former offices in Newmains, an address in Seath Road Rutherglen and elsewhere in Scotland.

The offence was committed between April 6, 2002, and December 31, 2003.

The four-part charge stated that McKenna induced McKindless staff to accept part of their weekly wages without deduction for tax and national insurance purposes, and caused these payments to be understated on documents to the Inland Revenue.

The charge also states that he caused the company’s failure to deduct the full amount of income tax and national insurance contributions in relation to these employees.

Furthermore, the 36-year-old caused annual tax returns to be submitted to the tax office that indicated employees had received lower amount of pay than they actually received.

It meant that the amount of tax and insurance contributions McKindless Bus Company was liable for was understated.

The scheme saw McKenna defraud the Inland Revenue of £10,632.

McKenna committed the offences six years before the bus company – which ran services throughout Lanarkshire and Greater Glasgow – folded.

In February 2010, the McKindless Bus Company announced that it would cease trading, with the loss of 80 jobs.

Following the redundancies last year, staff expressed outrage that, when they phoned the Inland Revenue, they were told they had not paid national insurance contributions or income tax since 2004.

However, they all thought the contributions were fully paid.

At Hamilton Sheriff Court last month, Sheriff Joyce Powrie deferred sentence on McKenna until October 19, calling for a range of reports.

He is ordained to appear on that date.

The court will also continue to consider a Crown application under Proceeds of Crime laws.