Dunmow driving school businessman spared jail for VAT fraud
PUBLISHED: 17:28 17 March 2016 | UPDATED: 17:28 17 March 2016
A Dunmow businessman who cheated on his VAT tax returns by £235,000 was today (March 17) spared a jail sentence.
John Maffia, 64, of Buttleys Lane, who owns John’s School of Motoring, which has taught driving instructors since the 1970s, underpaid his VAT as he tried to juggle debts, a judge heard.
Maffia pleaded guilty at Chelmsford Crown Court to one offence of fradulently evading VAT between December 1, 2011 and June 4, 2015 by submitting false returns.
He received a two-year prison sentence, suspended for two years, with 300 hours of unpaid work.
The judge heard how Maffia submitted inaccurate returns for his sole trader business, in which he employs 25 drivers and has 100 sub-contractors, for three-and-a-half years.
In total, he owed more than £500,000, including to the bank and on credit cards as well as HMRC.
Judge Patricia Lynch QC told Maffia he was “a lucky man” to escape prison and said judges were now encouraged to consider the effect of custodial sentences on others, not just defendants.
The judge said: “There are many, many small businesses who suffer the same difficulties that you do who nonetheless continue to pay their tax.
“You kept the business afloat by not paying VAT. Others have been in the same situation and they have paid their VAT.”
Prosecutor Daniel Taylor said an HMRC paid a routine visit to assess the business’s credibility and Maffia told the investigator that he had been reducing his figures as he was unable to pay the VAT bills.
Initially he had entered figures genuinely in error twice but when they weren’t picked up he didn’t attempt to rectify them and carried on inputting lesser sums.
Defending, Laurie-Anne Power said Maffia had built up his business since the 1970s and it was only in the last three years he had begun to cheat the revenue.
He only paid himself £30,000 a year and he and his wife didn’t lead luxurious lifestyles. Money was re-invested in the business, which remained profitable.
Ms Power said: ““He has a huge amount of debt which he was trying to juggle all from the profit from the business.
“He was burying his head in the sand. He was aware that what he was doing was wrong but in his mind it was a short term measure he was going to adopt. He was effectively robbing Peter to pay Paul.
“It was a relief when HMRC came knocking. He knew exactly how much he owed. He knew they would catch up with him.”
Ms Power said Maffia was genuinely remorseful and if he went to prison the business would close.
She added he was already faced with selling his house to meet confiscation proceedings and to repay debts. He was also repaying sums to HMRC.