Michael Stainer  who cheated his employees and the taxman out of £473,097.07 while running The Grand is facing jail.
Michael Stainer (pictured), 74, trousered the contributions of 50 employees when he was in charge of the The Grand hotel. One of the employees at that time is now a sitting district councillor.
His wife, Doris Stainer (pictured), 60, was cleared after she insisted she had no idea what her husband was up to.
The couple had a property portfolio worth £4,940,000, but Michael Stainer still tried to wring every penny out of his staff.
One employee believed his payments were up to date but was horrified to be presented with a bill for more than £3,500.
When investigators turned up at the hotel, first in Jan 2015, and then again in July 2015, they were astonished by Stainer’s statement that he had not made the contributions because the hotel did not in fact have any staff.
He denied but was convicted of cheating the public revenue and fraud by false representation after a two week trial at Southwark Crown Court.
His wife denied the same charges and has been acquitted.
Judge Gregory Perrins told Mr Stainer:
‘Your sentence will take place then on the 8th of July as you heard. I am going to ask for a pre-sentence report. You should be under no illusions as to what the likely outcome is.’
Anthony Hucklesby, prosecuting, earlier said the couple owned The Grand between April 2011 and April 2015.
‘The business was operating through limited companies and during that time The Grand employed over 50 members of staff.
‘As an employer they were responsible for deductions of PAYE and national insurance contributions from The Grand’s employees at source.
‘Whilst Mr and Mrs Stainer applied deductions to their employees’ wages, they deliberately retained them rather than pass them on to HMRC.’
When HMRC officers visited The Grand on 15 January 2015, Stainer told them he could not understand why HMRC kept coming.
He said he did not run the business and was not part of The Grand, claiming it was owned by the employees.
But records on Companies House showed that at the time of the visit Stainer was the director of The Grand and his wife was the company secretary.
HMRC officers had to show the member of staff in charge of payroll how to generate payroll reports.
During the trial, HMRCs prosecutor Mr Hucklesby said:
‘These forms revealed the problem, The Grand was employing in the region of 50 members of staff and paying them net deductions.
‘The staff were employed by Grand Folkestone Ltd but never made any PAYE or national insurance contributions at all during the indictment period.
‘The employees were receiving their wages which were being deducted by the business payroll system.
‘Their taxes were not being passed on to HMRC and the Stainers were therefore enjoying the benefit of paying their employees a net rate and keeping their tax and national insurance contributions for themselves.’
Jurors heard HMRC officers seized documents, harddrives and computers in the now infamous “fishing expedition“ in July 2015.
Correspondence seized showed how Mr Stainer claimed that Kentish Estates Ltd had no employees and therefore did not need to pay tax.
He later claimed that paying back the tax debt he owed would mean he would have to lay off his employees.
‘The company’s and the defendants’ bank accounts show that between 6 April 2011 and 5 April 2015 there were very substantial net money flows between The Grand and the defendants’ personal accounts, in the region of £250,000,’ said HMRCs prosecutor Mr Hucklesby.
‘The majority of that money went into Doris Stainer’s personal account.’
He said the money was used to prop up the mortgage repayments on properties they owned, some of which were part of The Grand and totalled £4,940,000 in value. Also some of the money was used by Michael Stainer to defend his numerous cases against residents of the Grand, who took him to the Land & Property Tribunal many times between 2015 and 2020.
Michael Stainer has been convicted of all three counts; Doris Stainer was cleared of all three charges.
The judge has granted Stainer conditional bail ahead of the sentencing on 8 July.
The Shepway Vox Team
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