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Fraudulent IT contractor jailed for 5 years

IT consultant, Steven Maxwell, has been jailed for 5 years following a trial which found him guilty of evading over £650,000 in tax and NICs via the use of offshore tax structures.

Dumfries & Galloway resident Maxwell worked as an IT contractor for a number of City firms between 1999 and 2008, during which time he billed an estimated £2m in consultancy fees, and commanded daily contract rates of up to £800 per day.

Rather than trading via a limited or umbrella company – the most commonly used structures for consultants, Maxwell used undeclared offshore companies in the Isle of Man and Gibraltar to process most of his contract income.

The contractor did channel some of his income through a UK limited company after 2005, but failed to submit any tax returns to HMRC at any stage.

On April 16th, Maxwell was remanded in custody having been found guilty of evading £635,015 in tax liabilities.

The consultant’s defence claimed that Maxwell had given incorrect tax advice, and was “a shy individual and there is a touch of unrealism and unworldliness about him”, however Sheriff Kenneth Robb disagreed saying that the tax evasion was not a victimless crime, and that “it was a scheme that was long in the planning and very long in the execution.”

Interestingly, the 53 year old defendant claimed to have lost consultancy income following the 2007 Cumbria train disaster, where he had been hailed as a ‘hero’ for rescuing some of his fellow passengers. Sadly for Maxwell, this didn’t make up for HMRC findings that he had paid no tax at all on income received for the 9 years before the crash.

Maxwell was sentenced to 5 years in prison, backdated to April 16th.

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