A Keighley councillor has been sentenced to a suspended prison term for a business fraud.

A judge told former Conservative Robert Payne he was “clearly not fit” to run his accountancy firm and had breached the trust of a client.

Payne, who has represented Keighley West since May 2008, lost control of the running of his business and failed to pass on a £3,587 tax refund to a self-employed client.

Payne, 36, of Fell Lane, Keighley, set up ARL Enterprises (Europe) Ltd in 2007, although he was not a qualified accountant, Bradford Crown Court heard on Tuesday.

He registered the firm at his address and was sole director.

Prosecutor Peter Hammond said joiner Marc Gill went to Payne for help with his 2007/08 financial affairs.

Payne told him he was owed the money by HM Customs and Excise but Mr Gill was “fobbed off”, despite constant phone calls asking where his refund was.

Mr Hammond said that when Mr Gill rang the tax office direct in February 2009, he was told ARL Enterprises had been paid the £3,587.

Payne told investigators his business was in trouble. He had lost control of it and was “blurring” company and his own finances.

The firm was wound up in January this year but Payne still owed a partner £12,000, Mr Hammond said.

He asked Judge James Goss QC to disqualify Payne from acting as a company director.

Payne’s barrister, David McGonigal, said he accepted that breach of trust was an aggravating feature in the case.

Payne had pleaded guilty early on and was willing to pay Mr Gill compensation.

Mr McGonigal said that if Payne received a jail sentence of at least three months, he would be forced to resign his seat on the Council.

The money was not spent on luxuries. Payne had addiction problems and was attending Alcoholics Anonymous. He was now drink-free and helping others with similar problems.

“He has gone a long way to try to put this behind him,” Mr McGonigal said.

“He has not tried to avoid responsibility for what he has done.”

Judge Goss sentenced Payne to eight weeks’ imprisonment suspended for 12 months, with 100 hours’ unpaid work, and supervision from a probation officer.

He said Payne was a man of previous good character with difficulties in his life.

“This breach of trust of your client is so serious that only a prison sentence is appropriate,” the judge said.

He ordered Payne to pay back Mr Gill in full at the rate of £120 a month.

Judge Goss barred Payne from working as a company director or manager for three years, saying: “Clearly you were not fit to fulfil that role.”