Former tax boss Andrew Meeson set up the allegedly "fictitious" Moya pension schemes at the behest of convicted fraudster Thomas Scragg, a court heard yesterday.
Scragg was sentenced last year to 17 years in prison for carrying out a £34m tax and VAT fraud by laundering cash through the construction industry.
Giving evidence in his defence, Meeson (pictured) told the jury at Birmingham Crown Court that Scragg, the head of the Moya companies, asked him to set up the pension schemes.
The former president of the Association of Taxation Technicians described how he originally created a pension scheme through Scottish Equitable as part of Moya's composite company structure.
The composite companies were used to help construction companies avoid paying tax by employing their workers, making them shareholders and paying them dividends and expenses as well as salary, the jury heard.
Meeson told the court the Scottish Equitable scheme was established to strengthen the relationship between employer and employee in the composite company structure, alongside other benefits like statutory holiday pay, maternity pay and sick pay.
But Meeson said Scragg did not like the original pension scheme because Scottish Equitable demanded employer pension contributions were paid monthly - which, the court was told, affected the cash flow of the companies.
Meeson said Scragg asked to set up the Moya scheme after the government introduced defined contribution occupational schemes and SIPPs, which allowed companies to pay contributions at the end of their accounting year.
He said Scragg then asked to appoint a new trustee Shaun Stokes - the false name of co-defendant Steven Price - which Meeson said prompted the creation of the second Moya scheme.
He said the money he received from the Moya pension scheme was part of a £3.5m loan facility agreed between the scheme and Tudor Capital Management.
He explained the lack of paperwork for the Moya scheme because there had not been any transfers into the scheme or investments influenced by a controlling member.
Meeson, 52 is accused, along with Peter Spencer Bradley, 45, Alison Jayne Bradley, 48, and Steven Price, 48, of conspiracy to cheat HM Revenue & Customs between 1 January 2006 and 30 April 2010. All four defendants have pleaded not guilty.
‘Important to have an anchor’
Lack of innovation for solutions
Some 2,000 consumers affected
Achievements, charity work and other happy snippets