A HAMPSHIRE man convicted for carrying out a tax and National Insurance fraud worth almost £1m at a nursery has been jailed for five and a half years.

For five years Michael Scott cheated more than 180 members of his staff at two nurseries in Hampshire by deducting Pay As You Earn (PAYE) Income Tax and National Insurance contribution from their salaries but failing to declare it to HM Revenue.

At Southampton Crown Court this morning, Judge Peter Henry said the 63-year-old had cheated his fellow citizens and put the rights and entitlements of his staff in jeopardy.

Daily Echo: Michael Scott and his ex-wife Marina.

He said it was a rather "sad tale" of a successful self-made man, adding: "I am satisfied that you used this money for other business purposes because, as I have said, you had overstretched yourself."

Outside of court former employee Lorraine Instrell, 34, who worked at Pixies Day Nursery in Locks Heath for nine years, said she was pleased with the sentence.

She added: "I am over the moon. He deserves it. This has caused us all a lot of stress and upset and you don't expect someone to be able to do that to you."

As previously reported a jury took just two hours to find Scott guilty of abusing his position of trust as an employer at Pixies Day nurseries by failing to account for national insurance and/or pay as you earn (PAYE) payments.

During the four week trial the court heard how staff had believed that their tax contributions through PAYE had been made, between 2007 and 2012.

But they had never received any tax certificates and the Inland Revenue service was not aware of any payments had been made.

Because these contributions weren’t made the employees’ future pensions were affected and former members of staff at the nurseries in Locks Heath and Woolston were unable to claim jobseekers allowance.

After months of investigation by HMRC Scott, and his ex-wife, Marina Scott, both from Grovebury, Locks Heath, were eventually arrested.

Mrs Scott, 60, had pleaded not guilty to her involvement in the scheme and was acquitted earlier this month after Judge Peter Henry threw out the case against her of failing to disclose information that NI contributions and/or PAYE payments on behalf of staff had not been accounted for.

In mitigation, Charles Row told the court that Scott, who owns ten properties and a plane, is of previous good character and that his main concern is for his ex-wife and his staff.

He added that Scott's assets would see that HMRC were likely to recover most, if not all, of the money.

Judge Henry said that while the gross figure of money not paid totalled £950,00, he would sentence him on a net figure of £800,000.

He said that Scott had been "intimidating" and "overbearing" when any staff questioned him about the issue, adding: "Your employees were entitled to rely upon you."

"Millions of law abiding citizens pay their tax, which in no doubt causes some of them substantial problems, but they pay it because a civilised society can be run and maintained.

"To a large extent your fraud by failing to pay out this tax and National Insurance is a cheat against your fellow citizens."

Scot was also disqualified from being a director of any company for ten years.

John Cooper, HMRC's assistant director of criminal investigation, said: "Michael Scott brazenly robbed his employees and lined his own pockets at the expense of the wider tax paying public.

"Tax was deducted and shown on payslips but the money was not handed over to HMRC, leading to gaps in employees' tax records.

"HMRC is working with the victims of this fraud to correct their tax and contribution records.

"People with information about suspected fraud can contact the Tax Evasion Hotline on 0800 788 887."