An Aberdeen fish firm boss “never got around” to doing his taxes – and is now facing jail over almost £300,000 in unpaid bills.
Raymond Esslemont, 71, has been warned he should be jailed however his poor health could save him if the prison cannot accommodate his needs.
The pensioner spent years deducting income tax and National Insurance Contributions (NIC) from employees at his firm Raysalmon, but did not pass the money on to HMRC.
Esslemont, who Aberdeen Sheriff Court was told is now “all but bed-bound”, also failed to pay his own income tax and National Insurance Contributions, bringing the total figure evaded to an eye-watering £295,599.97.
When finally arrested, Esslemont told police: “I’m a disaster. A walking disaster.”
Fiscal depute Tom Procter said Esslemont and his wife Ilene had been involved in the fish processing and smoking industry in Aberdeen since at least the 1990s.
Between January 1 2006 and August 5 2011, his wife, on paper, was the sole director of Red MacGregor Smoked Salmon, however, in reality, Esslemont was “heavily involved” in the day-to-day running.
From August 5 2011 to April 5 2019, Esslemont had sole responsibility for the business, which was also known as Raysalmon, as a sole trader.
Mr Procter said: “Raymond Esslemont has a very poor compliance history with HMRC, which provides the context to these offences.
‘Accused had effectively disappeared from HMRC’s radar’
“In September 2013, HMRC petitioned for sequestration. The Esslemonts were declared bankrupt in October 2013, their house was subsequently sold and HMRC received a repayment of £27,440.33.”
HMRC commenced an investigation into these offences following contact from the Aberdeen Citizens Advice Bureau, which had heard from a woman who had worked for Esslemont for 10 years.
The woman was “concerned that her income tax and National Insurance Contributions (NICs), which had been deducted from her weekly wage, had not been passed onto HMRC”.
Mr Procter said: “When payslips were checked against HMRC systems it appeared that her suspicions were correct, as there was no record of her having worked for the
accused between 2007 and 2018.”
He went on: “Checks were carried out on HMRC’s various computer systems, which revealed that the accused had effectively disappeared from HMRC’s radar following the
2013 sequestration and that no income tax or NICs had been paid in respect of
his own employment or that of his employees since at least that date.
‘Virtually no trace’ of business
“The case was referred for a criminal investigation.”
The investigation identified that there was “virtually no trace” of Esslemont carrying out a business, with no premises, advertisement, or phone number found.
There was also no trace on the Land Registry, no tax records and no bank accounts or financial data.
All bills appeared to have been paid in cash.
While the partnership Red McGregor Smoked Salmon had been set up on HMRC’s PAYE system, no payments had been made to HMRC in respect of its employees from around 2006 onwards.
There were also no personal income tax returns in respect of Esslemont from 2006 onwards which would indicate he was engaged in business activities.
No PAYE records could be found for the new sole trader company formed in 2011.
Another employee, who was a foreign national, was left terrified of how Esslemont’s actions may impact her access to healthcare and pensions as there was no official record of her employment.
A third employee also gave a statement and said he’d worked for Esslemont since around 2003, earning £300 per week and believing his income tax and NIC deductions were being passed to HMRC.
But again, HMRC had no record of the man ever having worked for Esslemont.
‘Significant amount of online gambling’
A fourth regular worker was also traced, again with no HMRC record of employment
Between January 1 2006 and April 5 2019, across both the partnership business and the sole trading operation, Esslemont deducted a total of £50,817.58 in income tax from employees which he did not pass on to HMRC.
The amount of NICs deducted but not passed on over the same period totalled £70,750.73.
A detailed investigation into Esslemont’s bank accounts, dealings and profits made in his partnership and sole trader businesses revealed he had also evaded paying any income tax or NICs in respect of his own earnings.
It was also found that a user of one of the bank accounts was involved in a “significant amount of online gambling”.
Across the period of the libel, Esslemont evaded paying personal income tax totalling £156,416.55 and NICs personally owed totalling £17,615.11.
Esslemont was arrested at his business premises on February 28 2019.
‘A walking disaster, I’ve made a mess of it’
Mr Procter told the court: “He stated that he had worked in the fishing industry since he was about 16 years old and that he had been self-employed since at least 1995.
“When it was pointed out that HMRC had no record of him paying tax during the period libelled, he admitted that he never got around to doing his own self-assessment.”
Esslemont told the police in interview: “I’m a disaster. A walking disaster, I’ve made a mess of it, and it hasn’t been a very good idea of mine.”
He also admitted that since at least 2011/2012, when he started trading as
Raysalmon, he never got around to paying any of his employees’ income tax or
NICs to HMRC.
He claimed that he always paid his employees the full gross amount shown on their payslips and not the amount net of tax but admitted that he never explained this to them.
‘Decision-making was, quite frankly, disastrous’
Esslemont expressed “regret” that he had not done things properly “from the start”.
Esslemont, of Margaret Place, Aberdeen, pled guilty to two charges of being knowingly concerned in the fraudulent evasion of income tax and two charges of being knowingly concerned in the fraudulent evasion of paying NICs.
Defence agent Liam Mcallister said: “He takes full responsibility for his decision-making which was, quite frankly, disastrous.”
He added his intentions had been “relatively good and pure” in providing incomes for employees.
Mr Mcallister said Esslemont appeared in court accompanied by his wife Ilene, who had previously also faced charges before the Crown accepted her not guilty pleas.
Sheriff’s jail warning
The solicitor went on to describe how Esslemont, who appeared in the dock in a wheelchair, was in very poor health.
He added: “He’s physically reliant upon his wife and daughter.
“I was hugely surprised to see Mr Esslemont here in court.
“He’s now all but confined to a wheelchair and there are other ongoing health issues which cause great concern for me in terms of how his care needs can be met going forwards.
“He is all but bed-bound and has been for years.”
Sheriff Morag McLaughlin said: “Mr Esslemont, I think you know that this is so serious that prison, but for your frailty, would be absolutely inevitable, and a significant sentence at that.”
She deferred sentence for further investigations to be carried out into Esslemont’s health and care needs.
But the sheriff warned: “You should prepare yourself for the likelihood of a prison sentence.”
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