Kenneth Scott, 69, from Durham, abused his position of trust while running an accountancy firm with five offices across the North East.
He charged clients VAT but never passed it on to HM Revenue and Customs (HMRC), instead pocketing the funds for himself.
This deception has left many of his former staff facing lasting consequences, including disrupted access to State Pension entitlements and complications with benefit claims.
Scott used the proceeds of the fraud to fund a lavish lifestyle, including a £30,000 luxury cruise and the purchase of an Aston Martin.
HMRC has since restrained several of his assets, including multiple properties and his pension, as part of ongoing efforts to recover the stolen money.
He was arrested at his home in April 2021 and later admitted the fraud at Newcastle Crown Court. He was sentenced at the same court today (Friday, April 4).
Recovery proceedings are currently underway.
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Gary Darrington, Operational Lead at HMRC’s Fraud Investigation Service, said: “As an accountant, Kenneth Scott should have known better than to try and cheat the system.
“He stole from the taxpayer and damaged the tax records of his employees, which we have been working hard to correct.
“Accountants hold a position of enormous trust and this sentence should serve as a warning to the minority of corrupt professionals who wrongly believe they can use their knowledge to commit or facilitate tax crime.
“Anyone with information about suspected tax fraud can report it online.”
