A LEADING Wirral restaurateur who cheated the taxman out of almost £500,000 has been jailed for 21 months.

Liverpool Crown Court heard that pride kept Arthur Rodney Heron struggling to keep his ailing business alive so as to maintain his social standing and keep members of his family and friends employed.

Heron, a partner in Pastimes Restaurant, Hamilton Square, Birkenhead, pleaded guilty to a charge of fraudulently evading VAT between August, 1988, and May, 1998, and six charges of cheating the public revenue between April, 1993, and May, 1998.

Jailing the 58-year-old, Judge John Phipps said: "In essence, what you did was to under-declare your income for the purposes of VAT so that Customs & Excise were deprived of VAT you should have paid.

"You failed also to declare wages and overtime payments to staff so that income tax and national insurance payments which ought to have been paid were not. The cost to the Revenue and Customs & Excise was £480,000 a large amount representing a prolonged and systematic fraud."

The judge went on: "Those who perpetrate such frauds prey on every honest tax payer in this country. For that reason, such offences have to be marked by immediate imprisonment.

"Everyone accepts your fraudulent conduct was not to fund any extravagant lifestyle but you used the money to keep alive an ailing and failing business.

"You have not made a penny from this and you are bankrupt in every sense. I accept that what stands before me is a broken man who has lost his good character."

Mr Peter Davies, prosecuting, said the total VAT defrauded was £234,000 and the sum involved in tax and national insurance evasion was £246,000.

Heron, known as Rodney, was a business partner in Pastime Restaurants, with outlets including the restaurant and tea room in the same premises, the Burleydam Coffee Shop in Little Sutton and restaurant facilities at HMS Plymouth and Heswall Golf Club.

His brother Brian, the other business partner, as involved in catering only while Heron was responsible for the finances of the firm, which was registered for VAT in 1974 but ceased trading in April 1998. Both men were made bankrupt five months later.

Mr Davies told the court that customs officers covertly visited the restaurant in 1997 and 1998. Meals were bought and transactions completed, and it became apparent that receipts and records were not being kept properly. Till rolls were also being destroyed, amended or not being totalled properly.

When interviewed by Inland Revenue in January, 1999, Heron agreed he understood the PAYE procedure and accepted he had not properly taxed all the wages and overtime he had paid.

He said the evasion began when there were 'serious financial problems' with the business and he alone was responsible for the incorrect returns made, he said.

Mr Henry Riding, defending, said Heron was so proud to be seen as successful by his family and friends that he became incapable of accepting that the business was failing. He struggled to continue when the business should have failed years before.

He told the court that Heron had not taken a holiday while working for the restaurant in 15 years and went on: "It is accepted he has not got two ha'pennies to rub together as a result of his offending."

Heron was made bankrupt shortly after the raid on his premises in March, 1998, and the penthouse flat over the restaurant was repossessed with the business. He he now lives in housing association accommodation in Albion Street, Birkenhead, added Mr Riding.