TWO businessman convicted of VAT fraud have been given an eight-month extension to help pay off their debt to the revenue.

John Hind and Robert McLean failed to pay VAT from the inception of their business, Atlas Welding and Engineering Supplies, in 1998.

But it only came to light after an investigation into the affairs of the company, based at Lake Road, Houghton-le-Spring, by revenue officials in 2007.

The inquiry was launched as it was discovered the business was using a de-registered VAT number.

It resulted in the pair, of previous good character, being charged with being concerned in the fraudulent evasion of VAT, which they admitted at a hearing at Durham Crown Court, in 2010.

Both conceded they knew of the mounting VAT liability, but said they had attempted to take steps to address the situation.

They claimed to be owed £72,000 by another company which subsequently went bust, therefore they used what should have been paid in VAT to try to ensure Atlas remained afloat.

Judge Christopher Prince deferred sentence to allow the pair to pay off their VAT debt.

He said they should do everything to repay the revenue.

But, he left the threat of potential prison sentences hanging over them should they fail to make adequate repayment.

The case has been re-listed at the court every six months since to check on their progress making the repayments, which include interest.

At the last hearing, in May, the court heard £190,000 had been repaid, with a final instalment of £60,000 due by an end of October deadline.

But when the pair came before the court yesterday (WED OCT 24), Judge Prince was told only another £20,000 has been repaid since the last hearing.

Tony Davis, representing Hind and McLean, said: “The figure they have now repaid is higher than that they owed, but there have been penalties and interest, and the company has had a hefty Corporation Tax Bill.

“They are doing everything they can possibly do to ensure their own guarantees to the corporation are not lost.”

Mr Davis said they hope to repay the outstanding £40,000 by next March.

But Judge Prince ordered Hind, 47, of High Street, Low Pittington, near Durham, and 52-year-old McLean, of Huxley Drive, Chester-le-Street, to pay the rest of the outstanding amount at the rate of £5,000 per month, by June 1 next year.