A HAMPSHIRE couple carried a tax and National Insurance fraud worth almost £1m at a nursery, a court has heard.

Jurors at Southampton Crown Court heard how ex-husband and wife Michael and Marina Scott failed to provide HMRC with documents showing that their employees had paid tax and NI.

It was the first day of a four-week trial of the coupled who are charged with offences taking place while running Pixies Day Nurseries in Locks Heath and Woolston between 2007 and 2011.

The court heard how staff had believed that were had paid their tax contributions through PAYE but had never received tax certificates and the Inland Revenue service were not aware that any payments had been made.

Prosecutor Robin Leach said: "During this period the defendants employed in the region of about 60 members of staff at anyone time in these business and National Insurance contributions and tax payments through Pay As You Earn were deducted from the wages to a total value of in excess of £900,000. We're not dealing with small sums here.

"It's alleged that the defendants failed to file these returns in respect of the deductions being made."

The court heard how staff had resigned as more and more of them found out that NI and tax payments had not been made on their behalf and were unable to track down tax certificates proving they had been made.

It eventually led to former members of staff unable to claim any job seekers allowance because payments hadn't been made and this failure also affected their pensions.

The couple, both from Grovebury, Locks Heath, were arrested on November 3 following an investigation by Her Majesty’s Revenue and Customs (HMRC).

They ran day nurseries at two locations in Locks Heath and Woolston, Southampton, which were attended by hundreds of children.

Michael Scott, 63, has denied abusing his position of trust as an employer by failing to account for national insurance contributions and/or pay as you earn payments.

Marina Scott, 60, has pleaded not guilty to failing to disclose information that national insurance contributions and/or pay as you earn payments on behalf of staff had not been accounted for.