Former Blackpool bar owner Paul Kelly and crooked accountant convicted over £4.9m tax fraud

Paul Kelly, former boss of Ma Kelly’s, evaded paying £4.9million in tax over a number of years with help from his corrupt accountant John Parry.

Kelly submitted fraudulent VAT returns and deducted tax and National Insurance payments from employees’ salaries but failed to pay it to HM Revenue and Customs (HMRC).

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The 63-year-old indulged in a luxury lifestyle, splashing hundreds of thousands of pounds from the proceeds of his crimes on a yacht, expensive Bentley and Rolls Royce cars, a £100,000 watch and a £2,000 Versace dining service set.

Kelly and Parry, 70, were both found guilty of cheating the public revenue and perverting the course of justice after an eight-week trial at Preston Crown Court concluded on Wednesday (April 23).

Kelly, from Cleveleys, was found guilty of 17 counts of cheating the public revenue and one count of committing an act/series of acts with intent to pervert the course of public justice.

The perverting the course of public justice offence is linked to a 2017 conviction for a planning enforcement breach brought by Blackpool Council. Kelly was criticised for a ‘flagrant and persistent disregard’ for planning laws when he was in charge of Ma Kelly’s South in Lytham Road, South Shore.

Proceeds of Crime proceedings were subsequently brought to establish the benefit Kelly gained from the breach.

During the course of the proceedings Kelly - with the encouragement and assistance of Parry - introduced false documents.

These documents were tax returns (that were never filed with HMRC) and were intended to mislead the court into believing income had been returned and tax paid to HMRC.

How were they caught?

HMRC officers arrested Kelly at Gatwick Airport on his return from a trip to Barbados in November 2018, and Parry was interviewed on the same day.

A search of Kelly’s home uncovered bundles of cash including £29,190, $6,283, € 3,000 and 800 in Singapore dollars. The money was seized and forfeited in September 2019.

A further search of one of the business premises found digital files proving Kelly had not been declaring profits and had underdeclared VAT for several bars over a six-year period from March 2012.

The pair will be sentenced at Preston Crown Court on July 25, 2025.

HMRC said action to recover the proceeds of crime is underway.

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Zoe Gascoyne, deputy director for HMRC’s Fraud Investigation Service, said: “Paul Kelly abused his position of trust to steal from clients and staff members, and John Parry assisted him in further stealing from the taxpayer.

“Tax fraud is never a victimless crime and the eye watering sums he spent on cars and jewellery should have been funding the public services we all rely on. 

“I hope this result serves as a warning to the minority of corrupt professionals who wrongly believe they can use their knowledge to assist clients committing fraud.

“We can and will work with our law enforcement partners to bring you to justice and we encourage anyone with information about any type of tax fraud to report it online.”