A painter and decorator who swindled the taxpayer out of tens of thousands of pounds by failing to register his VAT has escaped a jail sentence.
Kenneth Wheatley failed to hand over £46,868.84 to HMRC after he cancelled his account and informed them his Interiors Plus decorating business would be trading below the VAT threshold.
But the self-employed business owner, known to customers as Kenny, continued to trade profitably and he began cashing his payment cheques at a money bureau in a bid to avoid paying the tax bill.
The tradesman, from North Berwick, East Lothian, cashed cheques for work he had carried out worth close to £300,000 at cheque cashing firm ClearACheque at Edinburgh’s Tollcross area over a two year period.
But the 50-year-old was caught swindling the taxpayer after police raided the cheque cashing business on a separate matter and uncovered paperwork relating to Wheatley’s deception.
Wheatley swerved a jail term for his crime and instead was handed a Restriction of Liberty Order by Sheriff Frank Crowe when he appeared at Edinburgh Sheriff Court on Wednesday.
The order means the decorator will have to stay within his home address between 9.30pm and 6am for the next four months.
The court previously heard Wheatley had run his VAT-registered business from 1996 but cancelled his HMRC account in 2010 as “his practical turnover would be below the threshold for VAT”.
Fiscal depute Ann McNeill told the court: “In a separate unrelated enquiry police were executing warrants for a company called ClearACheque and through this investigation HMRC obtained documents and it became clear the accused was still trading as Interiors Plus.
“108 transactions were identified totalling £289,000 and using this information the police got a warrant for the accused’s home address and it was searched.
“It became clear the accused had been trading and that the VAT should have been paid - the sum £46,868.84 had been evaded.”
Defending solicitor David Allan told the court that Wheatley had tried to negotiate repaying the money to HMRC but after sending a cheque for £500 he heard nothing back and the cheque was not cashed.
Mr Allan told the court almost all of the swindled cash had been paid back to HMRC and his client had “adopted a mature attitude” to his crime and had owned up immediately.
The solicitor added Wheatley had managed to pay back the money owed after the first offender’s family had helped out with payments.
The court was also told Wheatley’s Interiors Plus firm currently employs two tradesmen and “all his tax matters are up to date”.
Sheriff Frank Crowe said: “You may have paid back the money but the way I look at it is this was pretty deliberate for about two years, and we as tax payers all missed out on that money.
“I am still within my rights to consider a prison sentence but I recognise you have no record prior to today so I am prepared to issue an alternative to a custodial sentence.”
Wheatley admitted to fraudulently evading VAT amounting to £46,868.84 by using the services of money service bureaus to cash cheques payable to himself and failing to submit returns to HMRC between July 1, 2012, and April 14, 2014.
The ClearACheque company was run by Eddie Ramsay - a friend of gangster Paul Ferris - and was raided by police in March 2014 over an alleged £350 million scam.
Ramsay ran ClearACheque with his son Stuart Ramsay, 39, and daughter Louise Hislop, 44, before the firm closed in August 2014.
Ramsay once owned Edinburgh’s Powderhall and Glasgow’s Ashfield greyhound stadiums and tried to buy Livingston FC.