Director Disqualification for accounting offences

Case 1 – Director disqualification for failing to maintain and deliver up accounting records

Director Disqualified for 6 years by Order at trial.

With regard to the affairs of the liquidated company, the following are, in the opinion of the Secretary of State, the matters by reference to which The Company Director is unfit to be concerned in the management of a limited company:

In the period between 31 July 2017 and 26 September 2018, the company director as sole appointed director, failed to ensure that the insolvent company maintained and/or preserved adequate accounting records, or in the alternative, failed to deliver up such records as were maintained and/or preserved, and therefore it has not been possible to:

• Confirm how and when cash of at least £1,383,378, held on 31 July 2017 in the Insolvent company’s Santander bank account, was disposed of and if the disposal of those funds represented genuine business expenditure.
• Verify if receipts of, at least £581,427 deposited into liquidated company’s Cashplus bank account between 08 January 2018 and 25 September 2018 were all in respect of genuine business income or represent the entirety of The Insolvent Company’s income over this period.
• Verify if payments of, at least £490,923 made from liquidated company’s Cashplus bank account between 08 January 2018 and 25 September 2018 all represented genuine business expenditure.

Case 2 – Director disqualification for failing to deliver up accounting records

Director Disqualified for 9 years by a signed undertaking of the director.

The company director failed to ensure that the liquidated company maintained and/or preserved adequate accounting records from 1 October 2018 onwards or alternatively he has failed to deliver up adequate accounting records to the Liquidator. As a result, it has not been possible to:

• Determine why the trading style of the liquidated company appears to have changed in May 2019 from an IT consultant to a supplier of IT goods;
• Determine why the company director received a net amount of £8,812 through the liquidated company bank account between January 2019 and November 2019;
• Verify whether the transactions via four the Liquidated Company accounts through a non-bank payment provider were in the normal course of business, being a) a GBP account used from 25 June 2019 to 04 March 2020 with expenditure totalling £908,975 and income totalling £908,977 b) a USD account used from 23 June 2019 to 13 January 2020 with expenditure totalling 530,398 and income totalling 530,398 c) an EUR account used from 25 June 2019 to 20 August 2019 with expenditure totalling 15,676 and income totalling 15,676 and d) an AED account used from 14 October 2019 to 23 October 2019 with expenditure totalling AED 36,956 and income totalling AED 36,956;
• Determine why the company director received a net amount of £539,030 through the GBP account of the non-bank payment provider between June 2019 and February 2020, £368,664 of which occurred when he knew or ought to have known that Innovation was insolvent;
• Determine why The Company Director’s associated company received a net amount of £52,214 through the GBP account of the non-bank payment provider between August 2019 and January 2020;
• Determine why The Company Director’s associated company received a net amount of £60,506 when he knew or ought to have known that Innovation was insolvent;
• Determine why The Company Director received a net amount of 17,050 through the USD account of the non-bank payment provider in August 2019;
• Establish what happened to IT equipment valued at the equivalent of £227,861 (based on government published exchange rates), obtained by Innovation on credit, resulting in claims in the liquidation from nine trade creditors totalling the equivalent of £161,575;
• Establish the purpose of transactions from the Liquidated Company bank account totalling £107,750, paid to a third party in February 2019 with the reference MS, and whether these payments were legitimate business expenditure.

Case 3 – Director disqualification for failing to maintain and deliver up accounting records

Director Disqualified for 4 years by a an undertaking agreed by the director.

The Company Director failed to ensure that the insolvent company maintained and/or preserved adequate accounting records or, in the alternative, he failed to deliver up to the Liquidator such records as were maintained. As a result it has not been possible to:

• Verify the accuracy of HM Revenue & Customs determinations raised on 15 July 2019 under Regulation 13 for the tax periods 2014/15 to 2018/19 totalling £776,017.
• In the absence of purchase invoices, determine if payments made from the company bank account during the period July 2018 to July 2019 were for the benefit of the company.
• Determine the beneficiary of cheque payments recorded on the company bank statements for the period July 2018 to July 2019 amounting to £53,000.
• Explain cash withdrawals from the company bank account for the period July 2018 to July 2019 amounting to £11,876 or establish whether those withdrawals were for legitimate business expenses.
• Explain the reason why payments were made to The Company Director from the company bank account for the period July 2018 to July 2019 amounting to £111,389.
• Establish the true amount due in respect of the directors overdrawn loan account.”

Case 4 – Director disqualification for failing to maintain and deliver up accounting records

Director Disqualified for 5 years by a director signed undertaking.

The Company Director failed to ensure that the insolvent company maintained and/or preserved adequate accounting records from at least 01 October 2020 to 20 December 2021, the date of liquidation, or in the alternative, he has failed to deliver them up to the Liquidators. As a result, it has not been possible to determine:

• the liquidated company’s true asset position;
• The amount of income generated by the liquidated company and the nature of its disposal;
• The purpose of payments made by the failed company, or to verify that payments were legitimate company transactions;
• Unexplained and unsupported cash withdrawals, totalling £76,021 in the period from 01 October 2020 onwards, as identified by the Liquidators;
• Unexplained and unsupported transfers totalling £9,725 to another company of which The Company Director was director
• The nature and extent of transactions with, or benefiting, The Company Director, or confirm the final position between The Company Director and the insolvent company, including whether The Company Director is a creditor or a debtor of the company;
• The liquidated company’s true tax position, including details of outstanding tax liabilities to HM Revenue & Customs.

Case 5 – Director disqualification for failing to maintain, preserve and deliver up accounting records to liquidator

Director Disqualified for 5 years by a signed undertaking of the director.

Following the Liquidator’s appointment on 18 September 2020 the Company Director failed to deliver up the accounting records of the Company, or in the alternative the defender failed to maintain and/or preserve the accounting records which were adequate to explain the trading and financial position of the Company in the period between the appointment of the defender as director on 5 November 2018 and liquidation. As a consequence, it has not been possible to verify the following:

• For the year ending 30 November 2019 the Company submitted dormant accounts to the Registrar at Companies House; therefore in the absence of the accounting records it is not possible to verify:
• Period: 5 November 2018 to 30 November 2019 ACTIVE: 111671792v1
• why, during the period 28 February 2019 and 30 November 2019, the bank statements for the current account operated by the Company received receipts totalling £855,716 of income which can not be confirmed as bona fide business transactions; and
• why, during the period 28 February 2019 and 30 November 2019, the bank statements for the current account operated by the Company reveal payments from the account totalling £762,984 of which £366,552 was paid in wages, £4,220 was paid to HMRC, and £392,212 was paid in general expenditure.
• In the absence of the Company accounting records for the period 1 December 2019 to liquidation, it is not possible to verify the following:
• whether the receipts totalling £3,224,027 paid into the current account between 1 December 2019 and 11 September 2020 are a true representation of the turnover achieved by the Company;
• if the payments made from the account in the period 1 December 2019 to liquidation totalling £3,316,995, of which, £1,124,928 was paid in wages and £2,192,067 was paid in general expenditure;
• on 17 May 2020 the Company received a Bounce Back Loan in the sum of £45,000, of which £21,266 was paid to the Company. In the absence of Company accounting records it is not possible to determine the purpose of this payment and whether it was used for the benefit of the Company;
• what, if any, assets were owned by the Company and what became of any owned assets at liquidation;

Period: 1 December 2019 to 18 September 2020 ACTIVE: 111671792v1

• the level of remuneration received by the defender in the period 5 November 2018 and 18 September 2020 or any amounts owed to, or by, the defender in respect of any director’s loan account; and
• in the absence of the Company submitting Value Added Tax (VAT) returns from VAT quarter February 2019 onwards it is not possible to verify if the VAT assessments issued by HMRC in the absence of filed VAT returns totalling £293,581 are a true reflection of the VAT owed by the Company.

Case 6 – Director disqualification for failing to maintain and deliver up accounting records

Director Disqualified for 6 years by Order of the Court.

The Banned Director failed to ensure that the insolvent company maintained and/or preserved adequate accounting records, or in the alternative, has failed to deliver up such records as were maintained, with the consequence that it is not possible to determine:

• In the absence of sales records, whether payments made into the liquidated company bank account totalling £1,761,270 between 22 December 2017 and 19 August 2019 constitute all of the company’s sales and if there were any sales after that which were not paid into its bank account. It is not possible to verify if there were any outstanding book debts at the date of liquidation.
• Whether, in the absence of adequate purchase records, payments from the liquidated company bank account, totalling £1,762,006 between 02 January 2018 and 19 August 2019, were to the failed liquidated company’s benefit.
• What happened to assets the company acquired on or around 22 November 2017 (the date of incorporation) from the administration of an unconnected company for £40,000 and whether the liquidated company disposed of any further assets it acquired between 22 November 2017 and liquidation, if it did, if any sale proceeds were used for its benefit or if it had any assets at liquidation.
• The amount of drawings paid to directors since 22 November 2017 and if he was a debtor or a creditor at liquidation.
• The amount of VAT that should have been reported and paid over to HM Revenue & Customs since 01 December 2018.
• The amount of Corporation Tax liability owed to HMRC for the accounting period ended 31 November 2018 and to liquidation.
• When company ceased trading.

The insolvent company did not file Annual Accounts at Companies House for year ending 30 November 2018 due by 22 August 2019.

Case 7 – Director disqualification for failing to maintain and deliver up accounting records

Director Disqualified for 7 years by Court Order.

The Director Disqualified failed to ensure that the liquidated company maintained and/or preserved adequate accounting records from at least 1 November 2019 the day after the last filed accounts to 18 May 2021, the date of liquidation, or in the alternative, he has failed to deliver them up to the Liquidator. As a result, it has not been possible to:

• Determine balances of Directors Loan Accounts

• Determine if cash withdrawals have been made in the ordinary course of business and for benefit of the company. Between August 2020 and March 2021 £111,420 was removed from the company’s bank account by cash withdrawal
• Determine if any disposal of assets or business has been for fair value
• Determine director benefits and remuneration and whether correct tax has been declared
• Establish full extent of the liquidated company creditor’s
• Determine if payments made to a connected company totalling £192,900 were in the ordinary course of business and for the benefit of the company.

Case 8 – Director disqualification for failing to maintain and deliver up accounting records to liquidator

Director Disqualified for 6 years by a director signed undertaking.

The Company Director failed to ensure that in the period from the last filed accounts, as at 31 October 2017, to liquidation, on 26 November 2018, the insolvent company maintained and/or preserved adequate accounting records, or in the alternative, he failed to deliver up to the Liquidator such records as were maintained and/or preserved. As a result, it has not been possible to:

• Deduce without adequate sales records what element of the £5,295,142 paid into the liquidated company’s bank account from 31 October 2017 until the date of liquidation, constituted legitimate sales income in that period. The Company Director has provided no explanation of these transactions.
• Of the £5,295,142 paid into the company in liquidation’s bank account, information from the bank shows that £1,196,037 was received in cash.
• Deduce without adequate purchase records what element of the £5,252,835 paid out of the insolvent company’s bank account from 31 October 2017 until the date of liquidation, relate to bona fide company expenditure in that period. The Company Director has provided no explanation for these transactions.
• Of the £5,252,835 paid out of the insolvent company’s bank account, information from the bank shows that £2,376,659 was paid to a money transfer service, £1,181,222 was paid to a jewellery firm, £109,854 was withdrawn in cash and £12,180 was transferred to other accounts.
• Establish the level of the liquidated company’s assets and what has happened to them prior to the liquidation.
• The accounts for the year ended 31 October 2017 list tangible assets of £266,493 and current assets of £222,833. No assets are listed in the liquidated company’s Statement of Affairs.

The tangible assets stated in the accounts for the year ended 31 October 2017 list plant and machinery with a net book value of £222,820. The Liquidator has only been informed of one trading address, that being residential premises. The liquidator has not indicated that any plant and machinery was located at the trading address and so it is therefore uncertain as to what plant and machinery was utilised by the insolvent company.

The current assets include stock of £152,358, debtors of £68,321 and cash at bank and in hand of £2,154. The liquidated company traded from residential premises and it is therefore uncertain where stock valued at £152,358 would be held.

The lack of any records means that it is not possible to confirm the asset position in the filed accounts as at 31 October 2017.

Case 9 – Director disqualification for failing to maintain and deliver up accounting records to liquidator

Director Disqualified for 8 years by Order of the Court.

The Company Director failed to ensure the insolvent company maintained and/or preserved adequate accounting records, or alternatively The Company Director failed to deliver up such accounting records as were maintained despite repeated requests to do so. Due to the lack of accounting records available between 31 August 2017 and 27 August 2020, it has not been possible to:

• Determine in the absence of sales invoices or other supporting documentation the reasons for receipts totalling £1,210,583 into the company’s bank account from 31 August 2017 to 30 June 2020 and whether all income has been accounted for
• Determine in the absence of purchase invoices or other supporting documentation the reasons for payments totalling £1,514,322 out of the company’s bank account from 31 August 2017 to 13 August 2020 or verify that this was legitimate company expenditure.
• Determine the total remuneration and benefits taken by the Directors
• Determine the amounts properly due to HM Revenue and Customs (HMRC) or verify the accuracy of tax returns
• Determine why dormant accounts were filed for the period ending 31 August 2018 when bank statements indicate that the company was trading prior to that period.
• Verify the total amount owed to the sole known creditor, HM Revenue & Customs, who submitted a claim of £92,110, or whether all assets have been disclosed to the liquidator.

Case 10 – Director disqualification for failing to maintain and deliver up accounting records to Administrators

Director Disqualified for 11 years by Order at trial.

The Company Director failed to ensure that the insolvent company maintained and / or preserved adequate accounting records from 01/04/2019 onwards or alternatively he failed to deliver up adequate accounting records to the Joint Administrators. He has also failed to fully cooperate with the Joint Administrators and explain or provide assistance to them and as a consequence of this and the lack of records and other documentation, the Joint Administrators have been unable to deal with the following matters:

• Identify the whereabouts of £165,000 of company assets identified in the accounts to 31 March 2019.
• Realise £81,545 of book debts, along with a claim identified by the Joint Administrators against a debtor for £157,168.

An analysis of the company’s bank account by the Insolvency Service for the period 01/04/19  24/08/20 shows payments into the account totalling £1,107,234 and payments out of the account totalling £1,130,112, which he has failed to explain. The bank transactions show the following which the Insolvency Service has not been able to verify or explain:

Inputs into the account

• 26 transactions from a third party totalling £756,347
• 34 transactions from him totalling £116,290 titled loan from B The Company Director.
• 37 various payments into the account totalling £52,481.
• 3 transactions from Company T totalling £47,245.
• 5 cheques totalling £34,640.
• 2 bank giro credits totalling £10,014.

Outputs out of the account:

1. 251 payments to him totalling £538,711 titled Loan Re. This amount exceeds the £116,290 paid into the account by him and the purpose of the withdrawals is not known. Furthermore, the filed accounts dated 31/03/19 show that he owed the company £32,684 at that date.
2. 164 various payments out of the account totalling £200,822.
3. 308 card payments totalling £43,024.

• A Government’s £50,000 Bounce Back Loan was received on 23/06/20 and a payment of £25,000 was made to a 3rd party on 24/06/20, 9 days before the company was placed into Administration on 03/07/20.
• 3 payments totalling £24,500 titled Marco Loan Repa.
• 39 cash withdrawals totalling £16,382.

Establish the full nature of the insolvent company’s trading activities during the period 01/04/19  24/08/20 and whether these were connected with genuine trading purposes.

Establish the level of remuneration and other benefits taken by him as the sole director of 1st liquidated company and any related tax implications. He made significant withdrawals from the company’s bank account and it is not known if they were in respect of legitimate business expenditure or used for his personal benefit.

Case 11 – Director disqualification for failing to maintain and deliver up accounting records

Director Disqualified for 4 years by Court Order.

The Company Director failed to ensure that the insolvent company maintained and / or preserved adequate accounting records from 1 November 2016 onwards or alternatively he failed to deliver up adequate accounting records to the Liquidator. In that:

• The only financial statements for the Company were prepared for the year ending 31 October 2016 which shows that the Company was dormant with a surplus of £1 on the balance sheet and was signed by him on 30 June 2017.
• However the Company bank statements show that in the period from 14 October 2016 to 22 October 2018 £703,275.87 was paid into the Company account and £703,210.39 was paid out. In the absence of adequate records, it is not possible to explain the transactions in the Company bank account and identify if the payments out were to the company’s benefit.
• The Company submitted returns for the VAT quarters from October 2016 reclaiming a total of £232,777.72 in VAT and when HMRC carried out a compliance check the Company failed to evidence the refunded tax by providing adequate supporting accounting information required by HMRC.
• The Company bank statements show that in the period from 29 November 2016 to 07 July 2017 11 VAT repayments totalling £232,777.72 were paid into the account.
• Without adequate accounting records it is not possible to demonstrate that the VAT refunds claimed were properly due to the Company.

He states that after a HMRC investigation he destroyed all Company records as he believed that they would not be required again.

 HMRC petitioned for the Winding-up of the Company in respect of the VAT refunded and on 25 November 2019 the Company went into liquidation with liabilities of £234,460.75.

Case 12 – Director disqualification for failing to maintain and deliver up accounting records to the liquidator

Director Disqualified for 5 years by a signed undertaking of the director.

Between 07 January 2019 and 20 January 2021, a period during which he was appointed director, The Company Director failed to ensure that the liquidated company maintained and/or preserved adequate accounting records, or in the alternative failed to deliver up such records to the liquidator. As a result, it has not been possible to determine:

• Whether payments the liquidated company bank accounts totalling £685,515 related to genuine company expenditure.
• Whether £13,100 of cash withdrawn from those accounts was used for the benefit of the the liquidated company.
• the liquidated company’s financial position as at 20 January 2021 (the date on which the company entered liquidation), including its true level of liabilities, estimated on available information to be at least £74,685;
• Whether the liquidated company owned any assets and, if so, what happened to those assets.

The total value of losses suffered by tenants and landlords by the liquidated company failure to comply with its statutory obligations under the provisions of the Housing Act 2004 to protect tenancy deposits. The company liabilities include £16,701, the amount claimed by tenants and landlords in respect of this failure.

The balance as at 20 January 2021 on the company director loan account.

Case 13 – Director disqualification for failing to maintain and deliver up accounting records when trading ceased

Director Disqualified for 6 years by Order of the Court.

The Company Director failed to ensure that the liquidated company maintained and/or preserved adequate accounting records from 08 August 2017 to the date of cessation to trade, or in the alternative, he failed to deliver up such records to the Liquidator. As a consequence, it has not been possible to:

• Determine in the absence of sales records and contracts, the source of funds received into the insolvent company account totalling £2,383,923 between 10 August 2018 and 13 January 2020 and whether these represent legitimate trading receipts.
• Determine, in the absence of employee records, contracts, or purchase records, why funds were paid out of the failed company account totalling £2,344,307 between 10 August 2018 and 13 January 2020 and whether these related to genuine company expenses including:
• £81,510 identified as having been paid to particular third parties in the bank statements but where independent enquiries to those same third parties have resulted in responses confirming funds were not paid to them.
• Funds totalling £115,810 which were paid to a pension company for employees who cannot be seen receiving wages from the failed company’s bank account, and which continued after the date of Liquidation with contributions being made by another company.
• Determine the full details of the liquidated company’s trading between incorporation and liquidation, the dates when The Insolvent Company commenced and ceased trading, establish the cause of insolvency and establish whether this was a bona fide business model.
• Determine the amount of income received in the period outside the operation of IC Barclays’s account which commenced on 10 August 2018 and how this income has been utilised.
• Determine, in the absence of employee and wage records, the amount of PAYE, NIC and CIS owed to HMRC and whether this has been accurately accounted for.
• Determine in the absence of sales and purchase records, the amount of VAT owed to HMRC and whether this has been accurately accounted for.

Case 14 – Director disqualification for failing to maintain and deliver up accounting records to the company liquidator

Director Disqualified for 8 years by an undertaking agreed by the director.

The Company Director failed to ensure that the insolvent company maintained and/or preserved adequate accounting records from 08 August 2017 to the date of cessation to trade, or in the alternative, he failed to deliver up such records to the Liquidator. As a consequence, it has not been possible to

• Determine, in the absence of sales records and contracts, the source of funds paid into the liquidated company account totalling £6,208,940 between 26 September 2017 and 28 January 2020 and whether these represent legitimate trading receipts.
• Determine, in the absence of employee records, contracts, or purchase records, why funds were paid out of the insolvent company account totalling £6,207,353 between 26 September 2017 and 28 January 2020, and whether these related to genuine company expenses including:
  • £389,947 identified as having been paid to particular third parties in the bank statements but where independent enquiries to those same third parties have resulted in responses confirming funds were not paid to them.
• Determine, the full details of the liquidated company’s trading between incorporation and liquidation, the dates when The Insolvent Company commenced and ceased trading, establish the cause of insolvency, and establish whether this was a bona fide business model including:
• The director’s report for the meeting of creditors, signed by him, stated that the liquidated company traded as a Management Consultant within the construction sector, however enquiries indicate that funds paid into The Insolvent Company Two bank account totalling £2,090,054 related to unlicensed scrap metal sales.
• Verify, in the absence of employee and wage records, the amount of PAYE,NIC and CIS owed to HMRC and whether this has been accurately accounted for.
• Verify, in the absence of sales and purchase records, the amount of VAT owed to HMRC and whether this was accurately accounted for.

Case 15 – Director disqualification for failing to maintain and deliver up accounting records to the Official Receiver

Director Disqualified for 4 years by a director signed undertaking.

The Company Director between the period September 2017 to March 2019 failed to ensure that The Insolvent Company maintained and/or preserved adequate accounting records or in the alternative failed to deliver up such records as were maintained to the Official Receiver as liquidator. In consequence, the liquidator has not been able to satisfactorily quantify, verify and explain all the transactions of the liquidated company. In that the Official Receiver as liquidator has been unable to:

• In the absence of till receipts, a cashbook, or other sales records verify whether the payments into the company’s bank account totalling £2,875,461 constituted all of the company’s sales.
• In the absence of purchase invoices or expense receipts determine whether payments out of the company’s bank account totalling £2,875,815 were to the company’s benefit.
• Explain why payments were made from the liquidated company’s bank account to three associated companies, controlled by the same directors totalling £300,240 and the reason why payments were received into The Insolvent Company’s bank accounts from four associated companies totalling £247,265.
• Explain why payments appear to have been made in respect of expenses incurred by associated companies.
• Determine the true amount due in respect of the directors loan accounts.
• Determine the true liability for VAT and PAYE.
• Determine the cause of failure.

Enquiries have been made of the company accountants who have confirmed that they were unable to prepare annual accounts due to the lack of sufficient records delivered up.

Case 16 – Director disqualification for abrogating director duties

Director Disqualified for 4 years by Order of the Court.

The Disqualified Director abrogated her responsibilities as the sole director of The Liquidated Company between 25 August 2020 and Liquidation and as a result it has not been possible to determine:

Whether payments out of the company bank account between 14 September 2020 and 14 June 2021 totalling £32,500 were for legitimate company expenditure, as follows:

• £5,000 to Person A on 14 September 2020
• £5,500 to Person B on 28 September 2020
• £1,200 to Person A on 23 October 2020
• £17,000 to Person B on 15 December 2020
• £3,800 to Company A on 14 June 2021

The Disqualified Director was the sole appointed director from 25 August 2020, however states she did not take financial decisions in respect of the company and was therefore unable to answer any questions about the company’s affairs.

 At the date of Liquidation, the company had nil assets and trade creditors of £30,500 inclusive of £30,000 pertaining to a Bounce Back Loan (‘BBL’).

Case 17 – Director disqualification for failing to maintain and deliver up accounting records to joint liquidators

Director Disqualified for 6 years by an undertaking agreed by the director.

The Company Director failed to ensure that the failed company maintained and/or preserved adequate accounting records from at least 01 August 2019 until 15 December 2020, the date of liquidation, or in the alternative, she has failed to deliver up adequate accounting records to the Joint Liquidators. As a result, it has not been possible to determine:

• The insolvent company’s true asset position;
• the amount of income generated by the company and the nature of its disposal, including whether monies totalling £378,843 received from three other parties were received in the normal course of business and for a proper, legal business purposes;
• the purpose of payments made by the liquidated company, or to verify that payments were legitimate and legal company transactions, in particular large payments made following the receipt of monies from the three parties noted above, including cash withdrawals totalling at least £209,715 and payments to another party totalling at least £127,832;
• the nature and extent of transactions with, or benefiting, The Company Director herself, or confirm the final position between The Company Director and the failed company, including whether she is a creditor or a debtor of the company;
• The insolvent company’s true tax position, including details of outstanding tax liabilities to HM Revenue & Customs.

Case 18 – Director disqualification for failing to maintain and deliver up accounting records to the liquidators

Director Disqualified for 4 years by a director signed undertaking.

The Disqualified Director failed to ensure that the Liquidated Company maintained and/or preserved adequate company accounting records or in the alternative, following Liquidation, failed to deliver up the accounting records to the Liquidator when requested for the period from 26 November 2019 to Liquidation. As a result, it has not been possible to:

• Verify whether £359,623 paid into the bank account of The Disqualified Director between 26 November 2019 to Liquidation represents total legitimate income of the company.
• Verify whether £359,598 paid from the bank account of The Disqualified Director between 26 November 2019 to Liquidation represents total legitimate expenditure of the company.
• Establish the extent and nature of The Disqualified Director’s remuneration from 26 November 2019 to Liquidation.
• Establish whether payments of £88,738 to various third parties were payments in the normal course of trade.
• Verify whether money received under the HMRC Coronavirus Job Retention Scheme (CJRS) were all used for the payment of wages of furloughed staff, in particular;
• From 20 May 2020 to 30 April 2021, The Disqualified Director received in total £55,571 from HMRC CJRS. PAYE documents show for the tax year 2020/21 that £25,395 was the total amount paid to members of staff.
• Verify whether a Bounce Back Loan of £20,000 introduced into The Disqualified Director on 28 August 2020 with the express intention of providing economic benefit to the business was utilised for this purpose, in particular, the reason for a payment of £10,000 to a connected party paid on 01 September 2020.
• Verify the existence, ownership, location and value of the assets of The Disqualified Director, in particular;
  • Bank statements show that the Disqualified Director purchased machinery totalling £68,396. At the time of Liquidation, the Disqualified Director’s assets were detailed as £200 cash.
• In addition, it cannot be established whether or not such assets were transferred by the Disqualified Director when the restaurant was transferred to a third party prior to Liquidation. The Disqualified Director stated the restaurant was transferred in lieu of his personal debt to the third party.
• Verify the annual turnover of the company and whether the turnover exceeded the VAT threshold, and as such, whether the Disqualified Director should have been registered for VAT. Therefore, it cannot be established if there was any consequent liability for VAT.

At Liquidation, £27,740 was owed to creditors of which £19,657 was in respect of the BBL.

Case 19 – Director disqualification for failing to maintain and deliver up accounting records to the Official Receiver

Director Disqualified for 4 years by an undertaking agreed by the director.

The Company Director between the period September 2017 to March 2019 failed to ensure that The Insolvent Company maintained and/or preserved adequate accounting records or in the alternative failed to deliver up such records as were maintained to the Official Receiver as liquidator. In consequence, the liquidator has not been able to satisfactorily quantify, verify and explain all the transactions of the liquidated company. In that the Official Receiver as liquidator has been unable to:

• In the absence of till receipts, a cashbook, or other sales records verify whether the payments into the company’s bank account totalling £2,875,461 constituted all of the company’s sales.
• In the absence of purchase invoices or expense receipts determine whether payments out of the company’s bank account totalling £2,875,815 were to the company’s benefit.
• Explain why payments were made from the insolvent company’s bank account to three associated companies, controlled by the same directors totalling £300,240 and the reason why payments were received into the liquidated company’s bank accounts from four associated companies totalling £247,265.
• Explain why payments appear to have been made in respect of expenses incurred by associated companies.
• Determine the true amount due in respect of the directors loan accounts.
• Determine the true liability for VAT and PAYE.
• Determine the cause of failure.

Enquiries have been made of the company accountants who have confirmed that they were unable to prepare annual accounts due to the lack of sufficient records delivered up.

Case 20 – Director disqualification for failing to maintain and deliver up accounting records to the liquidator

Director Disqualified for 5 years by a signed undertaking of the director.

Between 07 December 2018 (the day of incorporation) and 10 May 2021 (date of liquidation), The Banned Director failed to ensure that The Liquidated Company maintained and / or preserved adequate accounting records, or in the alternative has failed to deliver up such records to the Liquidator. As a result, it has not been possible to:

• Verify the trading history of the company from incorporation to liquidation.
• Ascertain whether the company should be registered for Value Added Tax (VAT) and calculate any VAT liability due to H M Revenue & Customs given analysis of the bank statements indicates annual VAT thresholds have been met.
• Verify the true financial position of the company owing to no accounts being filed with Companies House from incorporation (07 December 2018) to date of liquidation (10 May 2021), accounts to 31 December 2019 should have been filed no later than 07 September 2020 (21 months after incorporation).
• Verify payments of £65,835 made from the company bank account between 02 February 2019 to 20 February 2021 and whether they were for the benefit of the company.
• Verify the extent of any PAYE / NIC debt due to HMRC. Bank analysis completed suggests that from 28 December 2019 to 22 February 2020 one employee was paid £30,175 by The Liquidated Company, above the threshold which PAYE / NIC should be paid.
• Confirm if payments made from the company’s bank account, including 6 payments totalling £9,000 described as rent, from 26 June 2020 to 30 January 2021 and £3,000 to a third party on 08 August 2020 were made for the benefit of the company.
• Verify the asset and liability position of the company at liquidation.
•  Explain the cause of failure of The Liquidated Company.

Case 21 – Director disqualification for failing to maintain and deliver up accounting records to the liquidator

Director Disqualified for 5 years by a signed undertaking of the director.

The Company Director between the period September 2017 to March 2019 failed to ensure that the insolvent company maintained and/or preserved adequate accounting records or in the alternative failed to deliver up such records as were maintained to the Official Receiver as liquidator. In consequence, the liquidator has not been able to satisfactorily quantify, verify and explain all the transactions of the liquidated company. In that the Official Receiver as liquidator has been unable to:

• In the absence of till receipts, a cashbook, or other sales records verify whether the payments into the company’s bank account totalling £2,875,461 constituted all of the company’s sales.
• In the absence of purchase invoices or expense receipts determine whether payments out of the company’s bank account totalling 2,875,815 were to the company’s benefit.
• Explain why payments were made from the liquidated company’s bank account to three associated companies, controlled by the same directors totalling £300,240 and the reason why payments were received into The Insolvent Company’s bank accounts from four associated companies totalling £247,265.
• Explain why payments appear to have been made in respect of expenses incurred by associated companies.
• Determine the true amount due in respect of the directors loan accounts.
• Determine the true liability for VAT and PAYE.
• Determine the cause of failure.

Enquiries have been made of the company accountants who have confirmed that they were unable to prepare annual accounts due to the lack of sufficient records delivered up.

Case 22 – Director disqualification for failing to deliver up accounting records

Director Disqualified for 9 years by an undertaking agreed by the director.

The Company Director failed to ensure that the Liquidated Company maintained and/or preserved adequate accounting records or, in the alternative, he failed to deliver up such records to the Liquidator as required. Due to the absence of accounting records available from 01 February 2020 to 16 July 2021, it has not been possible:

• To verify The Company Director’s explanation that funds of £351,381, which were received into the Liquidated Company business bank account, all represented genuine business income of the Liquidated Company.
• To verify The Company Director’s explanation that funds of £275,758, which were paid from the Liquidated Company business bank account, all represented genuine purchases and genuine business expenses of the Liquidated Company.
• To determine that funds of £15,308, which were paid from the Liquidated Company business bank account, represented genuine business expenses of the Liquidated Company.
• To verify The Company Director’s explanation that funds of £47,879, which were paid in cash from the Liquidated Company business bank account, all represented genuine business expenditure.
• To verify The Company Director’s explanation that funds of, at least £26,775, which were paid to him in addition to his wages, from the Liquidated Company business bank account were to be adjusted in his director’s loan account and confirm the accuracy of his director’s loan account at the date of liquidation.
• To verify The Company Director’s explanation that the proceeds of a Coronavirus Bounce Back Loan of £20,000, which the Liquidated Company obtained in May 2020, was used to meet the genuine business expenses of the Liquidated Company and the economic benefit of the Liquidated Company.
• Determine, based on the amount of funds being received into the Liquidated Company business bank account; if and when the Liquidated Company should have been registered for VAT purposes, the amounts of VAT that the Liquidated Company would have thereafter been required to account for to HM Revenue & Customs in respect of its trading activities; and the amount of any VAT liabilities that the Liquidated Company may have therefore been required pay to HM Revenue & Customs.

For the Liquidator to identify any receipts or payments that may have occurred which did not go through the Liquidated Company business bank account and for the Liquidator to be certain that all of the Liquidated Company creditors have been properly identified.

Case 23 – Director disqualification for not complying with statutory obligations

Director Disqualified for 3 years by a director signed undertaking.

The Company Director, as sole director of The Insolvent Company failed to ensure that it complied with its statutory obligations to HM Revenue Customs (HMRC). The Company Director failed to ensure that the liquidated company registered for Value Added Tax (VAT) purposes when due and as a result did not submit VAT returns to HMRC from 01 December 2017 to 29 February 2020, resulting in HMRC raising an assessment for £97,368.

• On 10 July 2019 HMRC made an unannounced inspection to the trading address
•  On 27 January 2020, HMRC sent correspondence to The Company Director requesting trading figures for 01 April 2019 to 31 December 2019. The Company Director agreed for HMRC to their data and best judgement to assess the liabilities.
• For the period 01 December 2017 to 29 February 2020, HMRC made the assessments of sales being £778,943 this was allowing for 10% cash sales and included an online food provider sales figures.
• The Company Director could not provide full records; assessors have used the HMRC Flat Rate Percentage to assess the business. The applicable flat rate percentage for this trade sector is 12.5%.
• HMRC therefore, calculated the company as owing £97,368 in VAT for the period 01 December 2017 to 29 February 2020.

 The total liabilities at liquidation are £98,567

Case 24 – Director disqualification for failing to maintain, preserve and deliver up accounting records

Director Disqualified for 5 years by an undertaking agreed by the director.

Whilst acting as a director of The Liquidated Company, The Disqualified Director failed to maintain, preserve and/or deliver up accounting records for The Liquidated Company. As a result, it has not been possible to determine:

• Whether assets listed in the accounts for the year ending July 2020, with a total value of £573,500, were properly disposed of and at their true value, and the use of any sale proceeds received in respect of them.
• The legitimacy of payments from The Liquidated Company bank account ending 7068 of £7,172,412.48 and receipts of £7,172,707.69 between 18 May 2020 and 16 November 2021, and whether these relate to bona fide business activities.
• The legitimacy of payments from The Liquidated Company bank account ending 8071 of £2,613,195.57 and receipts of £2,596,258.74 between 01 April 2020 and 11 April 2022, and whether these relate to bona fide business activities
• The number and details of bank accounts held by EMS.
• Whether HMRC’s claim in proceedings of £291,302 is accurate and whether liabilities to HMRC have been properly accounted for.

Case 25 – Director disqualification for failing to maintain adequate books and accounting records

Director Disqualified for 3 years by a signed undertaking of the director.

Between 01 June 2016 and liquidation on 15 January 2020, I failed to ensure that The Liquidated Company maintained adequate books and accounting records,

or, in the alternative, to preserve and deliver up to the Liquidator such records as were maintained, as a consequence of which it has not been possible to explain the following:

• Evidence provided by a customer of The Liquidated Company shows that between 01 June 2016 and 15 January 2020, The Liquidated Company received funds totalling £448,545 into a personal bank account owned by me and the co-director of The Liquidated Company. Due to the absence of adequate books and accounting records, it is not possible to determine whether those funds were received and whether they were expended in the interests of the company.
• Due to the absence of adequate books and accounting records, it is not possible to determine if the funds of £448,545 represented the entirety of the sales of The Liquidated Company after 01 June 2016, or whether there were further debtors.
• Due to the absence of adequate books and accounting records, it is not possible to verify the accuracy of HM Revenue & Customs claim of £412,361 in the liquidation of The Liquidated Company, in respect of unpaid tax liabilities and penalties by The Liquidated Company.

The last accounts of The Liquidated Company filed at Companies House, for the year ending 31 May 2016,detail tangible assets of £21,126, debtors of £93,844, and current liabilities of £89,246.

Due to the absence of adequate books and accounting records, it is not possible to determine whether The Liquidated Company acquired any further assets or liabilities between 01 June 2016 and 15 January 2020.

 The date The Liquidated Company ceased to trade or the cause of its insolvency.

Case 26 – Director disqualification for failing to maintain, preserve and deliver up accounting records to company liquidator

Director Disqualified for 5 years by an undertaking agreed by the director.

The banned company director of the insolvent company failed to ensure that between 26 February 2019 and 16 March 2022 (date of liquidation) it maintained or preserved adequate accounting records or he failed to deliver up such accounting records as were maintained or preserved to the Liquidator. As a consequence of this failure, it has not been possible to:

• Determine the usage of £199,471 which was paid to the liquidated company by a customer between December 2019 and January 2020.
• Establish the validity of a book debt for £200,000 disclosed by to the liquidator and whether the monies are recoverable.
• Establish a true and accurate trading history for the insolvent company and whether the company should be registered for VAT and calculate any VAT liability due to HMRC in respect of Value Added Tax.
• Establish a true and accurate deficiency position of the liquidated company at liquidation.

Case 27 – Director disqualification for accounting failings

Director Disqualified for 6 years by a director signed undertaking.

From 04 January 2019, the first date after the last submitted period end accounts, The Company Director (The Company Director) failed to ensure that the liquidated company maintained or preserved adequate accounting records, or in the alternative failed to deliver up such records to the Liquidator. As a consequence: –

• It is not possible to ascertain the reasons for transactions made from the company’s trading bank accounts totalling at least £108,167 and during the period from 04 January 2019 to Liquidation, or to establish whether the payments were made in respect of legitimate business expenditure, as follows:-
  • Withdrawals from current bank account 1 totalling £58,700 made between 04 January 2019 and 24 February 2020, described on the bank statements as ATM Withdrawal;
  • Withdrawals from current bank account 2 totalling £21,050 made between 02 May 2019 and 02 September 2019, described on the bank statements as Bank 25 Cornh;
  • Withdrawals from current bank account 3 totalling £26,500 made between 03 September 2019 and 07 March 2020, described on the bank statements as Cash Withdrawals at Bank Plc ATM;

It is not possible to verify whether all sales income, specifically cash sales, have been received for the benefit of the company, as all income received on all trading accounts are from online ordering and from card transactions.

At liquidation, total liabilities to creditors were £59,565, of which £51,727 was owed to HMRC.

Case 28 – Director disqualification for failing to maintain and preserve adequate accounting records

Director Disqualified for 5 years by Order of the Court.

The Director Disqualified failed to ensure that The Liquidated Company maintained and / or preserved adequate accounting records for the period between the last set of accounts filed at Companies House (31 January 2019) and Liquidation (23 October 2020) or, alternatively, he has failed to deliver up such records as were maintained to the Joint Liquidators. The Liquidated Company’s bank statements show payments and withdrawals of £4,296,353 between 01 February 2019 and 14 October 2020 but, as a result of the failure to deliver up adequate trading records, it has not been possible to verify:

•  the identity of the recipients of 28 payments made between 15 February 2019 and 05 October 2020 totalling £114,700;
• the reasons for 14 payments made between 05 July 2019 and 12 October 2020 totalling £136,217;
• why £176,028 was paid to him between 04 February 2019 and 13 October 2020 and whether any of these unexplained payments represent untaxed drawings or loans from The Liquidated Company that have not been declared to HM Revenue & Customs or to the liquidators;
• whether all the payments shown in The Liquidated Company’s bank statements were made in respect of its own affairs and liabilities or whether The Liquidated Company received full consideration for all the payments it made;
• whether any money is still owed to The Liquidated Company that could be collected by the liquidators;
• how The Liquidated Company’s liabilities of £960,218 as stated in its Statement of Affairs by him, were incurred and what consideration The Liquidated Company received that gave rise to these liabilities; given that a loss of £42,509 was shown in its last set of accounts.
• The Liquidated Company’s Value Added Tax liability;
• The Liquidated Company’s Construction Industry Scheme tax liability.

Case 29 – Director disqualification for failing to maintain, preserve and deliver up accounting records to the company liquidator

Director Disqualified for 6 years by Court Order.

The Company Director failed to ensure that the insolvent company maintained or preserved adequate accounting records or in the alternative failed to deliver up to the liquidator adequate accounting records from 1 August 2018, the period from the date of the last filed annual accounts for the year ended 31 July 2018 to the date of liquidation on 5 November 2020. Consequently, it is not possible to:

• Verify that funds totalling £30,388.92 obtained between 13 August 2020 and 05 September 2020 via claims submitted to HMRC in relation to the Eat Out to Help Out scheme were in relation to genuine sales eligible for inclusion in the scheme;
• Verify that Coronavirus Job Retention Scheme claims totalling £23,711.74 made by The Company Director and paid to a bank account held by a third party between 10 June 2020 and 19 October 2020 were legitimate;
• Confirm that cash withdrawals totalling £63,522.90 were for genuine business purposes.

From 13 August 2017 (the date at which The Insolvent Company traded in excess of the VAT threshold) The Company Director failed to ensure that the liquidated company registered for VAT as and when required, and subsequently failed to submit any returns to HM Revenue & Customs (hereinafter referred to as HMRC) in respect of VAT, or make payment as and when VAT fell due, in that:

• Records of sales made by the liquidated company via Just Eat show that The Insolvent Company traded in excess of the VAT threshold from at least 13 August 2017;
• The Insolvent Company registered for VAT on 02 May 2019, after its registration the liquidated company failed to submit any VAT returns to HMRC or make any payment in respect of VAT;
• The insolvent company was subject to an unannounced inspection by HMRC’s Hidden Economy Team on 21 May 2019 during which The Company Director

The Company Director was advised sales records need to be available for HMRC to ensure adequate tax was being paid;

HMRC issued requests to The Insolvent Company on 12 June 2019 and 17 July 2019 for delivery of records that would enable it to confirm the liquidated company’s VAT position. Failure to comply has meant that HMRC have been unable to estimate the liquidated company’s VAT liability and resulted in a £300 penalty being issued on 11 December 2019;

Further non-compliance led to HMRC issuing a £1200 penalty on the insolvent company on 13 January 2020.

Case 30 – Director disqualification for failing to maintain, preserve and deliver up accounting records to the company liquidator

Director Disqualified for 4 years by a signed undertaking of the director.

The Company Director failed to ensure the insolvent company maintained and/or preserved adequate accounting records from 22nd October 2018 through to Liquidation on 30th October 2019. Or in the alternative, following the liquidation failed to deliver up such records as and when required to do so.

As a result of these failures it has not been possible to establish:

• The purpose of £304,576 of transactions from the company account to apparent trade and expense type providers and whether these represent bona fide business transactions.
• The purpose of £151,612 of transactions from the company account to the linked company for Business and whether these represent bona fide business transactions.
• The purpose of £41,500 of transactions from the company account to the linked company, the insolvent company and whether these represent bona fide business transactions.
• Whether £58,981 of transactions to numerous persons labelled as ‘Wages’ in the company bank statements were subject to appropriate tax deductions.
• Whether £31,102 of transactions to numerous persons labelled as ‘Expenses’ and ‘Commission’ in the company bank statements were subject to appropriate tax deductions.
• Whether £60,017 of transactions to numerous persons labelled as ‘Subcontractor’ in the company bank statements were subject to appropriate CIS tax deductions.
• The accuracy of the claim made by HMRC in the liquidation of £7,658 from outstanding liabilities in regards VAT, (£6,710 in Tax, £5,505.70 & £948.15 in Surcharges)
• The accuracy of the claim made by HMRC in the liquidation of £143,065 from outstanding liabilities in regards PAYE, (£17,741) CIS (£123,587) and associated charges (£1,700 in penalties & 37.76 in interest).
• The true value and location of plant and equipment over which security was held by the liquidated company creditors.
• The true level of company creditors and the extent to which the IP has been hampered in recovering funds from company debtors

The cause of the liquidated company’s insolvency and verify the circumstances thereof.

Case 31 – Director disqualification for failing to maintain, preserve and deliver up accounting records.

Director Disqualified for 3 years by Order of the Court.

The Company Director failed to ensure that the company maintained and/or preserved adequate accounting records or, in the alternative, he failed to deliver up such records to the Liquidator as required. Due to the absence of accounting records available from at least 14 June 2018 to 14 December 2018, as the result it has not been possible to:

• Explain the nature of the company’s trading;
• Determine, in the absence of any sales ledger the whole of the company’s receipts and verify what those receipts related to, its turnover and debtor position.
• Nature of receipts paid into the company’s bank account between 14 June 2018 and 14 December 2018 amounted to £5,231,119
• Determine, in the absence of purchase ledger and purchase invoices the whole of the company’s expenditure and establish that all expenditure related to genuine company expenses. Payments from the bank account between 14 June 2018 and 14 December 2018 amounted to £5,019,851
• Determine the company’s true tax liability to HM Revenue and Customs (HMRC). HMRC lodged an estimated claim of £815,013.
• Determine the exact amount paid to him by way of remuneration and other benefits and whether such sums were properly subjected to proper taxation or the accuracy of his Director’s Loan Accounts.
• Determine the reason for the company’s failure.

Case 32 – Director disqualification for failing to maintain, preserve and deliver up accounting records to the company liquidator

Director Disqualified for 8 years by a signed undertaking of the director.

The Company Director failed to ensure that between 1 April 2017 and 30 August 2018 (date of liquidation) the insolvent company maintained or preserved adequate accounting records or he failed to deliver up such accounting records as were maintained or preserved to the Liquidator. As a consequence of this failure it has not been possible to:

• Determine the expenditure of the company for the period from 1 April 2017 to the date of liquidation or to determine whether all expenditure on the bank account used by the liquidated company; totalling £710,675; was for the benefit of The Insolvent Company.
• Determine the income of the company for the period from 1 April 2017 to the date of liquidation or to
• determine whether all receipts into the bank account used by the liquidated company totalling £262,135 for the period from 1 April 2017 to the date liquidation, were derived from trading.
• Determine the use of unidentified withdrawals totalling £112,390 from the bank account being a) cash withdrawals from 20 April 2017 to 1 August 2018 of £30,51 b) unidentified withdrawals from 31 July 2017 to 14 June 2018 of £12,610 c) monies payable to personal creditors of you from 18 April 2017 to 4 June 2018 of £29,420 d) monies payable to a relative from 24 October 2017 to 31 July 2018 of £39,850.
• Determine the accuracy of the HMRC claim in the insolvency for VAT of at least £8,752 which was all based on Assessment.”

Case 33 – Director disqualification for failing to maintain, preserve and deliver up accounting records

Director Disqualified for 3 years by a director signed undertaking.

From 30 January 2018 to 11 February 2019 The Company Director failed to ensure the insolvent company maintained or preserved, or in the alternative has failed to deliver up to the Liquidator, adequate accounting records. As a consequence, it has not been possibly to verify whether the use of company funds of £3,117,850 withdrawn in cash between 30 January 2018 and 11 February 2019 from the company bank account was used for genuine company expenditure and / or in the alternative to confirm that the company complied with its obligations to HMRC in respect of these funds withdrawn in cash, in that:

• Between 30 January 2018 and 11 February 2019 £3,117,850 was withdrawn in cash from the company bank account
• His explanation of the use of these funds is that they have been used to pay subcontractors via a third party

 The company did not register with HMRC as a Contractor in respect of the Construction Industry Scheme (CIS), and so has not carried out the required CIS checks in respect of subcontractor tax treatment. In addition, the company failed to make CIS returns to HMRC declaring payments made to subcontractors and has not made payments to HMRC in respect of any CIS deductions

 The company did not register with HMRC in respect of PAYE, and so did not make any PAYE returns or payments to HMRC in respect of any employees

As a result of the lack of records for labour utilised by JAB, it is not possible to establish the nature of the relationship between the company and the recipients of the cash.

As a result of the lack of records for labour utilised by the company it is not possible to establish the level of liability to HMRC in respect of those funds

In addition, insufficient evidence has been supplied to establish how much of the funds withdrawn in cash from IC bank account was used to pay for supplies of labour either by way of subcontracting or to employees, and so the use of the cash withdrawn totalling £3,117,850 is unknown

On liquidation £249,873.08 is owed to creditors, of which £245,244 is owed to HMRC in respect of VAT, £550 is owed to trade creditors, £3,329.08 to the company’s bank and £750 to the director.

Case 34 – Director disqualification for failing to maintain, preserve and deliver up accounting records to the liquidator

Director Disqualified for 7 years by a director signed undertaking.

The Banned Director failed to ensure the Liquidated Company maintained and/or preserved adequate accounting records or alternatively, the director failed to deliver them up to the Liquidator. In particular:-

• The accounting records which were delivered up to the Liquidator consist of a Petty Cash Ledger; purchase invoices dated 29 September 2019 to 30 November 2020; a cheque book; bank statements and assorted employee/payroll records.
• No purchase invoices were delivered in respect of the period 1 December 2020 to liquidation on 21 April 2021.

Consequences

In the absence of adequate books and records for the entire period of trading, it has not been possible to determine:

• the full and true amount due to HMRC in respect of VAT.
• The nature and/or purpose of payments from the Company’s bank account totalling £59,580 from 1 December 2020.
• confirm that company monies have been utilised appropriately and/or verify payments from the Company’s bank account totalling £241,279.

The Disqualified Director failed to ensure that the Company complied with its statutory obligations to HM Revenue & Customs (HMRC) to submit accurate returns and make payments when due and thereto caused the Company to trade to the detriment of HMRC from at least 07 February 2020 in respect of VAT and 22 April 2020 in respect of PAYE. In that:

VAT

• The Company registered for VAT on 01 October 2019.
• The first VAT quarter was 10/2019 and would be due for payment on or before 07 February 2020.
• The Company should have filed VAT returns in respect of the periods 10/2019, 01/2020, 04/2020, 07/2020, 10/2020 and 01/2021.
• The Company did not file any VAT return.
• The Company did not make any payments to HMRC in respect of VAT.
• In the absence of VAT returns being filed, HMRC raised VAT assessments for the periods 10/2019, 01/2020, 04/2020, 07/2020, 10/2020 and 01/2021 resulting in a claim (based on assessments) of £4,828 in respect of VAT.
• The Statement of Affairs recorded a VAT liability of £68,416.
• The accounting records which were delivered up to the Liquidator only include purchase invoices from 29 September 2019 to 30 November 2020 (nearly 5 months before liquidation) which total £197,252.10 plus VAT of £39,447.74.
• Therefore, based on the available accounting records, HMRC’s claim in the liquidation of £4,828 not an accurate assessment of the Company’s VAT liability and the VAT figure in the Statement of Affairs is more likely. However, in the absence of adequate accounting records, this cannot be determined.

PAYE

• The Company filed PAYE returns in respect of the period September 2019 to January 2021.
• The Company made payments to PAYE between 22 November 2019 and 24 August 2020 totalling £9,291.
• HMRC’s PAYE Ledger records that credits totalling £16,036 were allocated to the Company’s account (comprising of payments from the Company and employment allowance credits). When these credits are applied to the earliest PAYE liabilities, the period ended 5 April 2020 is the first period not cleared in full (which would have been due for payment on or before 22 April 2020).
• HMRC’s PAYE claim in the liquidation of £17,673 is made up of the liabilities from the following tax years: –
• 2019/2020 – £7,731.57
• 2020/2021 – £5,114.08

Comparative Treatment

The Company’s bank statements show that from 27 September 2019 to the cessation of trade, the Company received payments totalling £685,256 and expended £685,122 of which only £9,291 was paid to HMRC.

Case 35 – Director disqualification for failing to maintain, preserve and deliver up company accounting records

Director Disqualified for 6 years by an undertaking agreed by the director.

The Disqualified Director failed to ensure that the Liquidated Company preserved and/or delivered up records to the Official Receiver from 7 August 2019 onwards when he was appointed as a director. Due to absence and/or failure to deliver up the accounting records the Official Receiver has been unable to: –

•  Verify the assets and liabilities of the company at liquidation.
• Explain the movement in the financial position of the company from a Net Asset position of £1,325,800 as stated in the accounts for the period ending 31 July 2018, to a deficiency of at least £827,740 at liquidation.
• Ascertain the income and expenditure of the company.
• Ascertain the source of funds totalling £230,200 paid in from 1 August 2018 and whether these were legitimate company transactions.
• Ascertain why £478,275 was paid to a director of PNP1 between 23 July 2017 and 29 July 2019.
• Ascertain why £313,875 was paid to third parties between 29 March 2019 and 25 May 2019 and what happened to the assets purchased.
• Ascertain why £75,587 was paid to an associated company between 9 March 2019 and 27 July 2019.
• Verify the position of the director’s loan accounts.
• Verify whether PNP1 traded in a legitimate manner.
• Verify the cause of PNPI’s insolvency.

Case 36 – Director disqualification for failing to maintain, preserve and deliver up company accounting records

Director Disqualified for 7 years by a signed undertaking of the director.

The Disqualified Director failed to ensure that The Liquidated Company maintained and/or preserved adequate company accounting records, or in the alternative, following liquidation failed to deliver up such records as were maintained and/or preserved to the liquidator for the period 20 July 2019 to liquidation. As a result, it is not possible to:

• Establish the nature of trade
• Verify whether Bounce Back Loans totalling £50,000 introduced into the company on 12/05/20 and 18/11/20 with the express intention of providing economic benefit to the business were utilised for this purpose, including:
  • Payments to the director totalling £16,330
  • A payment of £24,000 to a third party for an unknown purpose on 12/5/20
  • A payment of £2,241 to a third party on 13/5/20
  • Payments to a third party of £1,000 on 20/11/20 and £4,999 on 24/11/20
  • Establish the amount and nature of transactions with third parties, including:
  • The reason for funds totalling £20,392 received from a third party based at the same trading address between 01/06/2020 and 13/01/2021
  • The reason for net funds of £273,332 received from a third party (£503,978 received and £230,646 paid out).
  • The reason for payments totalling £500,160 to a third party between 30/01/20 and 14/02/20.
• Establish the extent of the director’s remuneration and final balance of any director’s loan account.
• Verify the existence, ownership, location, value and whether there has been an accurate disclosure of The Liquidated Company’s assets to the liquidator, including:
  • The 25 mobile phones hired by the The Liquidated Company in early 2020 which cannot be located.
• Verify the number of vehicles owned and used by The Liquidated Company and their location.
• Verify the true liability to HMRC. Assessments were raised by HMRC for VAT periods ending 09/19 to liquidation as returns were not submitted. HMRC made a claim totalling £190,020 in respect of VAT (£188,118) and PAYE (£1,200). Interest of £702 is included in the claim.
• Verify other company liabilities.

Case 37 – Director disqualification for failing to maintain, preserve and deliver up company accounting records

Director Disqualified for 6 years by a signed undertaking of the director.

The Company Director failed to ensure that the insolvent company maintained and/or preserved adequate accounting records or in the alternative she failed to deliver up adequate records covering the period 21 September 2015, the date of commencement of trading to 18 March 2021, the date of liquidation, to the Liquidators. As a result, it has not been possible to ascertain or verify:

• The full extent of the company’s trading over the period from commencement on 21 September 2015 to liquidation on 18 March 2021 and that all such trading was passed through the company’s bank account in operation from 23 December 2015 to date of liquidation, which reflects receipts during that period of £2,499,394 from College 1, £43,000 from College 2, £11,391.07 from College 3 and cheques paid in totalling £17,491.85 from an unknown source, or why such receipts cannot be reconciled to IC financial statements which disclose turnover for the period of incorporation on 21 September 2015 to 30 September 2020 totalling £2,721,802.
• The services provided by relatives of The Company Director, and for which the company made payments totalling £171,865 over the period 17 October 2016 to 30 December 2020 and to ascertain the basis for and verify the reasons for payment and confirm such payments were in the best interests of the company and its creditors.
• The services provided by individuals as a Tutor/Assessor, to whom the company made payments totalling £1,766,250 over the period 25 January 2016 to 31 July 2020, to ascertain the basis for and verify the reasons for payment, and to confirm that such payments were in the best interests of IC and its creditors.
• The services provided by a contractor for small projects in Blackburn and as main contractor for reconfiguration of The Company Director’s house, to whom the company made payments totalling £41,421 over the period 15 July 2017 to 28 October 2019, to ascertain the basis for and verify the reasons for payment and to confirm that such payments were in the best interests of the company and its creditors.
• Whether funds have been utilised in compliance with funding arrangements between the company, College 1 and the Education and Skills Funding Agency.

 The company’s deficiency to creditors is currently anticipated to amount to £3,513,838.

Case 38 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 6 years by a signed undertaking of the director.

Between 01 November 2018 and 01 March 2021, the date of the liquidation, The Disqualified Director failed to maintain, preserve and, or in the alternative deliver up complete accounting records as maintained of The Liquidated Company, so that it has not been possible to establish:

• Why 16 cash withdrawals totalling £4,350.00 were made between 8 June 2020 and 17 August 2020 from the company bank account
• Establish who and why 56 unknown payments totalling £66,782.00 were made out of the company bank account between 18 September 2020 and 24 February 2021;
• Verify the turnover of The Liquidated Company and that all earnings were accounted for correctly;
• Verify that The Liquidated Company had a turnover of at least £200,000.00 to be eligible for the bounce back loan of £50,000.00 that was applied for and granted on 2 July 2020;
• Establish the income and expenses of The Banned Director and other staff;
• Establish who and why a cheque of £10,000.00 was paid out of the company bank account 25 August 2020;
• Confirm details of all trade suppliers and therefore the true value of trade creditors; Establish the true amount outstanding to HM Revenue and Customs (hereinafter referred to as HMRC) in respect of both VAT, PAYE/NIC and CT

Furthermore, it has not been possible for the Liquidator to establish whether The Liquidated Company had any goodwill or assets that may be realised for the benefit of creditors.”

Case 39 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 14 years by Order of the Court.

Between 01 January 2019 and 06 January 2021, The Company Director failed to ensure that the insolvent company maintained and/or preserved adequate accounting records, or in the alternative failed to deliver up such records to the liquidator. As a result, it has not been possible to determine

• The location of £30,000 cash at bank, which The Company Director disclosed in the liquidated company’s Statement of Affairs dated 23 December 2020. As such, the liquidator has been unable to realise the funds for the estate;
• The recipient(s) of three bank transfers made from the liquidated company account between 23 August 2019 and 30 August 2019 totalling £225,410, and the nature and purpose of these transfers;
• Whether payments totalling £532,763 made from the liquidated company bank account in the period, including cheque payments of £19,735, related to legitimate The Insolvent Company expenditure;

The insolvent company’s financial position as at 06 January 2021 (the date on which the failed company entered liquidation), including its true level of liabilities, estimated to be £1,331,024.

Case 40 – Director disqualification for breaching the terms of an invoice discounting agreement

Director Disqualified for 6 years by a director signed undertaking.

The Disqualified Director caused or allowed the Liquidated Company to breach the terms and conditions of its Invoice Discounting Agreement and this resulted in the provider of the Invoice Discounting Facility sustaining a loss. The provider has a claim in the Liquidation of £52,654.

This was as a result of submitting invoices that he knew or ought to have known were not due for payment in the value of the sums being submitted. This included duplicate invoices, cancelled jobs, invoices in respect of which credit notes were issued and invoices where he caused or allowed the Liquidated Company to collect monies direct in breach of the terms of the agreement.

• In respect of one debtor he caused or allowed the Liquidated Company to make requests to that debtor that payments be made direct to the company bank account in breach of the terms of the factoring agreement. The debtor states that she was informed that the Liquidated Company didn’t factor all of its invoices. Between 25 June 2020 and administration on 9 December 2020 that debtor was asked to make payments to the Liquidated Company direct totalling £135,184.
• These invoices should have all been notified to the provider of the factoring agreement and all of the payments should have been made to provider of factoring agreement. He caused or allowed the Liquidated Company to notify Bibby of invoices totalling £43,000 so that the Liquidated Company could draw down against those invoices whilst asking the debtor to pay the Liquidated Company direct.
• These invoices totalling £43,000 were paid in sum of £7,500 and £12,500 on 25 June 2020, £15,800 on 27 June 2020 and £7,200 on 30 June 2020, all paid direct to the Liquidated Company bank account.

He also failed to maintain, preserver or deliver up to the factoring provider complete invoices and proof of deliveries as required under the terms of the agreement.He failed to cause the Liquidated Company to maintain, preserve or deliver up to the administrator accounting records to account for the transactions of the company and to allow the provider of factoring facility to collect in amounts due to the company or alternatively determine whether the invoices submitted were valid invoices. In particular complete sales invoices and proof of deliveries were not available to the provider of the invoice discounting facility or their agents to collect in debts and £80,165 of the ledger remains uncollectable.

Case 41 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 5 years by an undertaking agreed by the director.

From the start of trading on 10 October 2019 to liquidation on 26 November 2021 The Director Disqualified failed to ensure that the Liquidated Company maintained and/or preserved adequate accounting records or, in the alternative, has failed to deliver up to the liquidator such records as were maintained. As a result, it has not been possible to:

• Account for the disposal of cash withdrawals totalling £220,935 from The Liquidated Company’s bank account including the disposal of Bounce Back Loan (BBL) funds obtained on 21 May 2020 and determine whether or not the BBL funds withdrawn in cash were used for the economic benefit of the business.
• Determine whether The Liquidated Company should have been registered for VAT based on turnover and what The Liquidated Company’s liability, if any, was due to HM Revenue & Customs in respect of Corporation Tax, Value Added Tax, Pay as You Earn and National Insurance Contributions

Case 42 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 9 years by a director signed undertaking.

From at least 01 January 2020 (being the date immediately following the last filed accounts) until 09 December 2021 (the date of liquidation) The Banned Director failed to ensure the Insolvent Company maintained and/or preserved adequate accounting records or in the alternative, failed to deliver up all such accounting records as were maintained for the liquidated company to the Liquidator, such that it is not possible to:

• Establish the true extent of the business activities carried out by the insolvent company.
• Establish the true takings of the liquidated company and verify whether cash income was used for the legitimate expenses of the business.
• Verify the balance of the Director’s Loan Account.
• Verify whether £237,883.69 of unexplained expenditure represents the legitimate business expenses of the liquidated company.
• Establish the insolvent company’s true liability to HM Revenue & Customs.
• Verify the reason for insolvency and accuracy of the Statement of Affairs.

Between 22 April 2019 and 9 December 2021, The Banned Director caused the liquidated company to trade to the detriment of HM Revenue & Customs (‘HMRC’) in respect of VAT, PAYE and NIC HMRC and as a result at the date of liquidation, HMRC had an estimated outstanding liability owing of £110,198.21. In that:

PAYE and NIC

• Submissions were made for the year 06 April 2018 to 05 April 2019 showing a liability of £757.96 outstanding on 22 April 2019. No payments were made by the insolvent company towards this liability. At liquidation the balance outstanding for this period was £757.96.
• Submissions were made for the year 06 April 2019 to 05 April 2020 showing a liability of £12,833.78. Reliefs of £3,000.00 were applied together with payments of £7,500.00 by the liquidated company. At liquidation the balance outstanding for this period was £2,333.78.
• Submissions were made for the year 06 April 2020 to 05 April 2021 showing a liability of £66,577.66. Reliefs of £4,000.00 were applied by HMRC but no payments made. At liquidation the balance outstanding for this period was £62,577.66.
• Submissions were made for the year 06 April 2021 to 05 April 2022 showing a liability of £27,039.43. Reliefs of £4,000.00 were applied together with payments of £3,505.04 by the liquidated company. At liquidation the balance outstanding for this period was £19,534.39.
• The Insolvent Company, including interest and charges, incurred PAYE and NIC liabilities of £110,359.03 while credits of £11,000.00 and payments for £11,005.04 were applied leaving an outstanding liability of £88,353.99.

VAT

• The Insolvent Company registered for VAT on 01 May 2020. The first VAT return for period 07/20 fell due on 08 August 2020.
• Between 08 August 2020 and 09 December 2021 no VAT returns were filed by the liquidated company.
• Due to non filing of returns HMRC raised assessments for VAT periods 04/21, 07/21, 10/21 and the final period up to liquidation totalling £4,623.83.
• No payments were made towards this liability by the failed company
• Analysis of bank statements for account 60-07-37 49447416 between 01 May 2020 and 09 December 2021 shows that The Insolvent Company received identifiable income of at least £464,474.60. Taking into account the reduced rate of VAT for hospitality business between 05 July 2020 and 30 September 2021, it is calculated that VAT estimated at £21,844.22 was due to HMRC for the sales made over this period.

Comparative Treatment

A review of the bank statements for the period 22 April 2019 to 09 December 2021 shows that the insolvent company received £877,179.53 and paid out £877,371.67 (excluding any contra entries). Payments, during this period, to HMRC totalled £11,005.04 while payments to all other class of creditors and third parties totalled £866,366.63 which included £120,454.86 to The Disqualified Director.

Case 43 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the Official Receiver

Director Disqualified for 6 years by Order of the Court.

The disqualified director failed to ensure that The Company maintained and/or preserved adequate accounting records, or alternatively, he has failed to deliver up to the Official Receiver as Liquidator such records as were maintained. Due to the inadequate accounting records for the period from 02 June 2016, until liquidation on 12 December 2018, it has not been possible to ascertain and verify the income, expenditure, assets and liabilities of The Company Director. Consequently, it has not been possible to:

• Establish the purpose of cash withdrawals made from The Company Director’s bank account totalling £45,434 between 23 September 2016 and 14 October 2017.
• Verify, in the absence of any sales records, whether payments into The Company Director’s bank account totalling £1,269,730 constituted all of the company’s sales and therefore determine whether there are any outstanding book debtors.
• Determine, in the absence of any purchase records, whether payments out of The Company Director’s bank account totalling £1,269,730 which were comprised of £45,434 cash withdrawals and £1,224,296 electronic payments, were for the company’s benefit.
• Determine whether there were any assets at or prior to liquidation.
• Determine the disqualified directors remuneration and any other benefit he derived from The Company Director, and the position of any Director’s Loan Account at liquidation.
• Verify the accuracy of the Statement of Affairs.
• Verify the reasons for The Company Director’s insolvency and the date it ceased to trade.
• Ascertain The Company Director’s liabilities to HMRC and verify the assessments raised by HM Revenue & Customs in the absence of any returns for Value Added Tax (VAT), Pay As You Earn (PAYE) and Construction Industry Scheme (CIS) Income Tax. The Company Director failed to make PAYE, CIS and VAT returns for the entire period it traded. HMRC submitted a final claim in the liquidation totalling £375,541 made up of PAYE, VAT, CIS and penalties.

Case 44 – Director disqualification for failing to exercise proper stewardship of the company

Director Disqualified for 5 years by a director signed undertaking.

The Company Director has failed to exercise proper control and stewardship of the insolvent company Ltd and its affairs. In particular:

Between 09 January 2019 and 12 November 2019 The Company Director has demonstrated a culpable lack of stewardship in that:

• He has caused or allowed the liquidated company to enter into credit agreements via which it has obtained goods and services on credit for which creditors remain unpaid in the liquidation with a resultant liability in respect of those creditors totalling at least £182,998
• He has caused or allowed the insolvent company to file contradictory accounts for the same accounting period, which, by The Company Director’s own admission, he has taken no steps to ensure the accuracy of, and the content of which cannot be verified due to a lack of available books and records

Due to his lack of stewardship and his failure to ensure the the liquidated company’s compliance with relevant legislation, The Company Director has either failed to ensure that The Insolvent Company maintained adequate accounting records or, in the alternative, he has failed to ensure that these were preserved and subsequently delivered up in the liquidation. As a result of these failures it has not been possible to:

• Establish the true level of the the company’s turnover and cost of sales
• Determine whether VAT returns submitted on behalf of the company were accurate and that, therefore, the liquidated company was entitled to receive a VAT reclaim of £51,624 from HMRC, given that the amounts processed through the only known bank account operated by the failed company were not sufficient to evidence a level of purchases and sales that would generate such a reclaim
• Determine which, if any, of the 3 sets of accounts filed by the company for the accounting period ending 31 August 2018 represented an accurate reflection of the insolvent company’s financial position
• Determine the validity of The Company Director’s assertion that he took instruction from an unappointed third party in respect of the liquidated company’s trading
• Establish the true level of the insolvent company’s liabilities nor confirm whether all creditors have been identified, and therefore whether the liabilities in the liquidation exceed the currently established total of £365,844
• Establish the date upon which the liquidated company ceased trading
• Establish the true nature of The the liquidated company’s trading activities and whether it was operated in a legitimate manner
• Identify whether any assets were owned by the liquidated company, as was stated in the final version of accounts filed for year ending 31 August 2018, and if so, determine what has happened to these assets or any proceeds generated by their disposal
• Identify the extent of remuneration and/or benefits received by The Company Director
• Determine why £49,000 was withdrawn in cash between 21 August 2019 and 03 September 2019, and whether this money was subsequently used for a purpose that was connected to the legitimate trading activities of the liquidated company.

Case 45 – Director disqualification for failing to maintain, preserve and deliver up company accounting records

Director Disqualified for 4 years by an undertaking agreed by the director.

The Banned Director has failed to ensure that The Liquidated Company has kept and maintained adequate accounting records, and/or in the alternative failed to preserve and deliver up such records as they were maintained. As a consequence, it has not been possible to ascertain or verify:

• That all income and expenditure has been recorded and can be accounted for;
• In the absence of prepared accounts or a bank account after 31 December 2017, establish the change in The Liquidated Company’s financial position from Net Assets of £57 as at 31 December 2017 to a Net Deficiency of £143,223.00 at liquidation;
• The extent of the Director’s Loan Account or evidence of transactions between The Liquidated Company and him;
• Establish the true amount owed to HMRC in respect of VAT, PAYE, NIC and Corporation Tax;
• Confirm the details of all trade suppliers and therefore the true value of trade creditors;
• Verify the cause of insolvency is true and accurate.

Case 46 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 6 years by Order of the Court.

The Company Director failed to ensure the insolvent company maintained and/or preserved adequate accounting records or in the alternative, following liquidation, failed to deliver up the company in liquidation’s accounting records to the liquidator when required such records and/or preserved. As a result, it has not been possible to:

 Verify the true liability to HM Revenue and Customs (HMRC) in respect of Value-Added Tax and in particular;

• establish whether IC held evidence of taxable supplies received during the VAT periods 04/17, 07/17, 10/17, and 01/18
• establish the amount of input tax that ought to have been claimed by IC during the VAT periods 04/17, 07/17, 10/17, and 01/18
• Verify HMRC’s decision to disallow input tax on FASHIONS’ VAT returns for the periods 04/17, 07/17, 10/17 and 01/18 which resulted in a underdeclared VAT liability in the sum of £121,409
• Verify the existence, ownership, value and whether there has been an accurate disclosure of the liquidated company’s assets to the liquidator
• Establish the amount of sales generated by the liquidated company
• Establish the amount of purchases made by the company and the amount of stock held by the company at cessation of trading in December 2018.
• Determine the date of the liquidated company’s insolvency and the extent, if any, to which the deficiency increased thereafter.
• Establish the extent of the directors’ remuneration or existence and final balance of any directors’ loan accounts.
• Determine the total expenditure of the liquidated company and determine whether all payments out of the bank account were for a purpose connected with the company’s business.
• Accurately determine the final creditors and liability position of the liquidated company.

Case 47 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 5 years by a signed undertaking of the director.

The Company Director failed to ensure that between 17 March 2017 and 22 November 2018 (the date of liquidation) the insolvent company maintained or preserved adequate accounting records or he failed to deliver up such accounting records as were maintained or preserved to the liquidator. As a consequence of this failure it has not been possible to:

• Determine the use of cash withdrawals totalling £135,684.29 from the liquidated company’s bank account between 18 May 2017 and 19 January 2018.
• Determine why the liquidated company paid a third party a total of £100,000 between 5 October 2017 and 27 October 2017.
• Determine the purpose of unspecified transfers out of the account totalling £44,944 between 20 March 2017 and 23 November 2017.

Case 48 – Director disqualification for accounting reasons failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 10 years by a director signed undertaking.

The Company Director failed to ensure that the insolvent company maintained and/or preserved adequate accounting records from 1 June 2019, to 02 August 2021, the date of liquidation, or in the alternative, he has failed to deliver them up to the Liquidator. As a result, it has not been possible to determine:

• The Insolvent Company’s true asset position;
• The amount of income generated by the liquidated company and the nature of its disposal;
• Whether the company was entitled to Bounce Back Loan (BBL) monies totalling £22,000 received on 17 June 2020;
• The purpose of payments made by the company, or to verify that payments were legitimate company transactions and that BBL funds were used appropriately for the economic benefit of the company in accordance with the terms of the BBL scheme; in particular payments totalling £27,475 made between 23 June 2020 and 15 June 2021;
• The nature and extent of transactions with, or benefiting, The Company Director, or confirm the final position between The Company Director and The Insolvent Company, including whether The Company Director is a creditor or debtor of the liquidated company;
• Determine the liquidated company’s true tax position and details of outstanding tax liabilities to HM Revenue & Customs.

Case 49 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 10 years by a director signed undertaking.

The Banned Director failed to ensure that the failed company maintained and/or preserved adequate records or, in the alternative, he has failed to deliver up any or sufficient accounting records, to explain the liquidated company’s financial affairs for the period from 30 June 2019, its last management accounts, to liquidation on 29 January 2020. In that:

• The insolvent company commenced trading in February 2015 and its last accounts filed were to 28 February 2019;
• Management accounts were prepared by the company accountant for the period to 30 June 2019;
• No accounting or administrative records have been delivered up for the period after 30 June 2019 to its liquidation;

Without such records it has not been possible to:

• establish what happened to assets totalling £65,871 shown in the management accounts to June 2019 and to verify that these were used for the benefit of the the company in liquidation;
• explain the change in the insolvent company financial position from net assets of £7,789 in June 2019 to a deficiency of at least £128,604 at the liquidation date;
• explain the source of income of £203,670 paid into the failed company bank account from 01 July 2019 and specifically verify that these were all the moneys received by it;
• determine the level of cash receipts and how this cash was disbursed;
• account for expenditure of £205,202 from the bank account from 01 July 2019, verify that this was all legitimate company expenses (or were accounted for in a director’s loan account) and confirm that all creditors have been disclosed in the liquidation;
• ascertain what was due to or from The Director at the liquidation date;
• determine whether payments to named individuals were wages payments and if so, whether tax due on these payments has been correctly accounted for to HM Revenue & customs (‘HMRC’);
• ascertain if the assessments for VAT raised by HMRC are reasonable;
• determine the reason for the liquidated company’s failure

Case 50 – Director disqualification for accounting reasons and VAT

Director Disqualified for 5 years by an undertaking agreed by the director.

The Banned Director failed to ensure that the insolvent company dealt properly with its tax affairs and as a consequence caused it to trade to the detriment of HMRC from at least 07 August 2018, being the date when VAT for the quarter to June 2018 became due, to liquidation on 29 January 2020. As a consequence HMRC has submitted a claim in the liquidation for £105,603. In that:

VAT

• The company registered for VAT on 23 February 2015 and filed returns up to the quarter to June 2019, thereafter HMRC raised assessments;
• The company returns to December 2017 were paid in full,
• No payments were made between March 2018 and February 2019;
• The Company’s last payment made for VAT was £12,500 on 07 February 2019, which was allocated to the return for March 2018 and in part-payment of that for June 2018;
• At the liquidation date a balance of £11,728 remained outstanding from June 2018, which should have been settled by 07 August 2018, and total VAT due was £86,459;

PAYE/NIC AND CT

• A further £9,140 was due for PAYE/NIC, dating from April 2019, together with Corporation Tax of £2,767;
• Treatment of creditors
• The Insolvent Company filed accounts to the end of February 2018 disclose that £8,163 was owed to trade creditors and £22,686 was due to HMRC;
• At the liquidation date there were no trade creditors outstanding and HMRC submitted a claim for £105,603;
• Bank statements show payments of £593,650 from 01 August 2018, of which £23,680 was paid to HMRC.

The insolvent company last payment made in relation to any taxation category was £2,733 on 3 June 2019

Case 51 – Director disqualification for accounting reasons

Director Disqualified for 6 years by a director signed undertaking.

The Company Director failed to ensure that the failed company maintained or preserved adequate accounting records, or in the alternative, failed to deliver up to the Liquidator adequate records for the period 02 July 2020 to 10 May 2021. As a result, it has not been possible to ascertain or verify:

• Whether the Bounce Back Loan received on 02 July 2020 was used for legitimate business expenses;
• Whether a vehicle purchased for £32,698 was a legitimate business expense;
• How the vehicle was disposed of and how the sale proceeds were used;
• Whether £25,000 transferred to an employee between 08 February 2021 and 18 March 2021 was for legitimate business expenses.

Case 52 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 6 years by Court Order.

The Company Director failed to ensure that the insolvent company maintained adequate accounting records from 02 May 2018 to the date of liquidation, or alternatively if such records were maintained she failed to preserve and/or deliver up such records to the Liquidator. As a result it has not been possible to determine:

• Company turnover between 02 May 2018 and 12 March 2019 or the extent of company money paid through the director’s personal account.
• Sales and purchases of the company.
• What happened to the goods ordered from four suppliers with a total value of £34,900 which the director states were defective. These were neither paid for nor returned.
• Whether the company had any assets/stock in trade which have not been declared.

The Company Director caused the insolvent company to order goods on credit from successive suppliers between at least 15 August 2018 and 30 January 2019, whilst failing to pay for supplies received or return those which were defective. Further, when a supplier refused further credit she supplied evidence of a payment which was later cancelled.

• Between 15 August 2018 and 10 September 2018 goods were ordered to the value of £31,639 from the petitioning creditor (supplier one).
• Between 20 September 2018 and 22 October 2018 goods were ordered from supplier two to the value of £1,296.
• Between 22 November 2018 and 26 November 2018 goods were ordered from supplier three to the value of £1,160.
• When supplier three refused to despatch a further order without evidence of payment, a screenshot was sent to the supplier showing payment had been made but once the additional goods had been despatched the payment was not completed.
• On 06 December 2018 a Winding Up Petition was presented at court by the petitioning creditor for £31,639.
• On 12 December 2018 and 30 January 2019 CCJ’s were obtained against the insolvent company regarding suppliers two and three respectively.
• On 30 January 2019 goods were ordered from supplier four to the value of £805 and credit application submitted by The Company Director. No payments were made, and it is not known what happened to the goods delivered.
• No payments were made to any suppliers in relation to all orders placed by the insolvent company and it is not known what happened to any of the goods.
• The director’s explanation for non-payment of goods was that they were defective and due to the suppliers’ returns policies she disposed of the goods herself but failed to obtain any evidence in support of the disposal.
• Returns policies provided by suppliers’ websites and correspondence provided by them contradicts the director’s explanation.

Each of the four suppliers have stated that no complaints were ever received from The Company Director in relation to defective goods and she continued to place further orders until they refused to supply further goods due to non-payment.

Case 53 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 7 years by a signed undertaking of the director.

From 23 January 2019 (the date of incorporation) to the date of liquidation The Company Director failed to ensure that the company directors maintained or preserved adequate accounting records, or in the alternative, he failed to deliver up such records to the liquidator, therefore it has not been possible for the liquidator to:

• Establish when the company began and ceased trading,
• Identify a bank account used for company trading transactions,
• Verify the total amount of sales income due and payable to the company during the period 23 January 2019 to 20 March 2020, the date of Creditors Voluntary Liquidation (CVL); and in particular whether it was received for the benefit of the company,
• Verify the total amount expended by the company during the period 23 January 2019 to the date of CVL; and in particular to establish whether the payments were made in respect of legitimate business expenditure,
• Verify whether the position of PAYE, NIC and CIS owed to HMRC as based on returns is correct,
• In the absence of sales and purchase records, verify the amount of VAT owed to HMRC,
• Quantify the true asset and liability position when The Company Directors entered into a CVL on 20 March 2020 having declared no assets and creditors liabilities to the value of £405,001.

Case 54 – Director disqualification for failing to maintain and deliver up company accounting records to the company liquidator

Director Disqualified for 5 years by a director signed undertaking.

The Company Director failed to ensure that the insolvent company maintained adequate accounting records from 1 October 2018 to creditors voluntary liquidation on 28 May 2021 or alternatively if such records were maintained he failed to preserve and/or deliver up such records to the Liquidator. The absence and/or failure to deliver up the accounting records has had the following consequences:

• The inability, to verify the source of the company income of £8,464,231 between 15 January 2019 and 14 May 2021.
• The inability, to verify the reason for payments of £8,467,007 to various recipients between 15 January 2019 and 14 May 2021.
• The inability, to establish whether the company had any debtors owing money to the company.
• The inability, to establish whether the company had any assets which have not been declared.

At Liquidation debts of £1,415,164 were owed including a debt of £1,406,864 to HMRC, £3,300 to Trade and Expense Creditors and £5000 to the director (for which no proof has been provided).

14th July 2021

Case 61 – Director disqualification for accounting reasons / CIS failings

Director Disqualified for 2 years by a director signed undertaking.

From April 2015 to April 2018 The Company Director failed to ensure that the insolvent company complied with its statutory obligations to submit returns and make payments to HM Revenue and Customs in respect of the company Industry Scheme (CIS) Tax, resulting in a liability to HMRC of £231,825.

The liquidated company failed to submit CIS Tax monthly returns or make payments to HMRC for the tax month ended 05 April 2015 to month ended 05 April 2018 inclusive. HMRC raised assessments for CIS liabilities for this period totalling £112,468 and imposed CIS penalties totalling £119,357. The liquidated company failed to make any payments in respect of these assessments and penalties, which remained outstanding at liquidation.

At liquidation liabilities to creditors other than HMRC was nil.

Case 62 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 5 years by a signed undertaking of the director.

The Company Director failed to ensure that the liquidated company maintained and/or preserved adequate accounting records, or in the alternative, failed to deliver up adequate accounting records to the Liquidator for the period from 03 October 2017 (date of incorporation) to 12 July 2019 (the date the company entered Liquidation). As a consequence, it has not been possible to account for the following:

• Whether payments from the company’s bank account totalling £5,438,003 were for a purpose connected with the insolvent company’s business, including payments totalling £16,500 to an individual, £5,900 Cash withdrawals and a £3,000 cheque payment. In the absence of any company records it is not possible to establish the purpose of these payments.
• Whether the receipts into the company’s bank account totalling £5,464,224 are a true representation of all the company’s sales.
• The true liability due to HMRC for VAT for the period 01 March 2018 to 31 May 2019. HMRC have raised an Officers Assessment in the sum of £940,426 for this period. In the absence of accounting records it is not possible to determine if this represents the actual level of VAT due by the company.
• The level of remuneration paid to the director and the amounts owed to, or owed by, the director in respect of any director’s loan account.
• The financial position of the company between 03 October 2017 and liquidation or the cause of failure.

Case 63 – Director disqualification for accounting reasons

Director Disqualified for 5 years by Order of the Court.

As the sole director of The Insolvent Company Ltd from 17 April 2018 The Company Director failed to ensure that the company maintained, preserved and / or delivered up to the Liquidator adequate accounting records, and as a consequence it has not been possible to establish the purpose of payments totalling £146,071 including cash withdrawals of £53,000 from the liquidated company’s bank account from 17 April 2018 to 31 May 2018.

Case 64 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 1 years by a signed undertaking of the director.

The Company Director failed to ensure that the company maintained adequate accounting records from 31 August 2019 to creditors voluntary liquidation on 10 November 2021 or alternatively if such records were maintained he failed to preserve and/or deliver up such records to the Liquidator. The absence and/or failure to deliver up the accounting records has had the following consequences:

• The inability, to establish debtors of £74,945 listed in the company’s Statement of Affairs on 04 November 2021 by him.
• The inability, to verify the reason for payments of £11,500 to a third party on 20 May 2021.
• The inability, to establish what happened to the company fixed assets of £10,071 as listed in the YE accounts 31 August 2019.
• At Liquidation debts of £106,334 were owed including a debt of £36,386 to HMRC and £69,945 to a bank.

Case 65 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 6 years by a director signed undertaking.

Between incorporation on 28 January 2020 and liquidation on 02 November 2021 (the period), The Disqualified Director failed to ensure that The Liquidated Company maintained adequate books and accounting records or, in the alternative, to preserve and deliver up to the Liquidator such records as were maintained, as a consequence of which it has not been possible to determine the following:

• The income and purpose of expenditure of The Liquidated Company for the above period, and the resultant asset and liability position at the date of liquidation.
• Whether a government backed Bounce Back Loan (BBL) of £30,000 met the application criteria regarding turnover and whose funds received by The Liquidated Company on 07 May 2020, and a top up of £7,500 received on 13 November 2020, were used for the benefit of the business, as per the stated terms and conditions.
• Whether any reasonable due diligence and research was undertaken in respect of the development of a prototype vehicle modification by The Liquidated Company, or whether any such prototype existed.

Case 66 – Director disqualification for accounting issues

Director Disqualified for 6 years by Order of the Court.

The Company Director failed to ensure that, in the period from incorporation on 02 May 2017, to its Liquidation on 18 December 2019, the failed company maintained and/or preserved adequate accounting records, or in the alternative, he failed to deliver up to the Liquidator such records as were maintained and/or preserved. As a result, it has not been possible to:

• Deduce, without adequate sales or banking records whether sales amounting to £1,098,766 declared on VAT returns for the periods ending 31 August 2017 to 18 February 2019 represented the true level of the company’s trading income.
• Deduce without adequate purchase or banking records, whether purchases amounting to £1,091,758 declared on VAT returns for the periods ending 31 August 2017 to 18 February 2019 represented the true level of the liquidated company’s expenditure, or whether any or all such purchases were for VNE’s benefit.
• Verify if the insolvent company owned any assets at any time between incorporation and liquidation, and if it did what happened to them.

On 23 April 2019 HMRC requested documents to support the VAT returns submitted by the liquidated company. The Insolvent Company failed to provide any records in support and as a result HMRC disallowed The Insolvent Company input tax resulting in a liability of £221,620, which remains outstanding at liquidation.

Case 67 – Director disqualification for accounting problems

Director Disqualified for 4 years by a signed undertaking of the director.

The Disqualified Director failed to ensure that the failed company maintained, preserved and/or delivered up adequate accounting records for the period 1 October 2018 onwards and in in the absence of the Company records, it has not been possible to determine:

• the true asset position of the Company, given the filed accounts for the year ending 30 September 2018 show assets of £20,333 whilst at liquidation the Company had assets of £3,600;
• whether the debtors of the company shown in the company’s accounts to 30 September 2018, totalling £10,944, have been repaid or remain outstanding;
• whether all creditors have been accounted for;
• the amounts received by or due from connected parties;
• the full and true extent of the Company’s liabilities in respect of Value-Added Tax, for which the company failed to submit returns or make payments throughout trade, in consequence of which HMRC raised assessments totalling £61,684.53 excluding interest, penalties and charges;
• the recipients of and reasons for cash withdrawals totalling £21,300 between 1 October 2018 and 15 November 2019;
• the recipients of and reasons for payments totalling £31,600 to unidentified parties between 1 October 2018 and 16 August 2019;
• the cause of the Company’s failure.

Case 68 – Director disqualification for failing to maintain, preserve and deliver up company accounting records to the company liquidator

Director Disqualified for 8 years by an undertaking agreed by the director.

The Disqualified Director failed to ensure the insolvent company maintained and/or preserved adequate accounting records from 28 February 2018 through to Liquidation on 22 October 2019. Or in the alternative, following the liquidation failed to deliver up such records as and when required to do so.

As a result of these failures it has not been possible to establish:

• The purpose of £469,306 of transfers to an unknown bank account and whether the transfers represent bona fide business transactions.
• The purpose of £168,372.50 of transfers to the company savings account and whether the transfers represent bona fide business transactions.
• The purpose of £32,940.26 of cash and ATM withdrawals from the company account and whether they represent bona fide business transactions.
• The purpose of £49,881.58 of payments to retail type establishments from the company account and whether they represent bona fide business transactions.
• The true Value Added Tax (VAT) liability for the period of the company’s trading history between 28 February and 22 October 2019. HMRC have a claim in the liquidation of £294,639.89.
• The true Pay As You Earn (PAYE) & National Insurance Contributions (NIC) liability for the for the period of the company’s trading history between 28 February and 22 October 2019. HMRC have a claim in the liquidation of £65,807.20.
• The financial position of the Company between 28 February 2018 and 22 October 2019 and whether transactions on its behalf represent bona fide business transactions.
• The true level of deficiency in the liquidation given the lack of any records that would enable the liquidator to calculate an accurate figure.
• The true level of company creditors and the extent to which the IP has been hampered in recovering funds from company debtors

 The cause of IC’s insolvency and verify the circumstances thereof.

Case 68 – Director disqualification for disposing of assets subject to finance

Director Disqualified for 9 years by a director signed undertaking.

On 26 November 2019 and in January 2020, The Banned Director as sole director of The Liquidated Company caused the company to dispose of assets which were subject to finance and did not belong to the company, resulting in losses to the finance companies totalling £307,942. No permission had been obtained to sell the assets and proceeds were not remitted to the finance companies. He has failed to maintain, preserve and/or deliver up any records to the Official Receiver that explain what happened to the sale proceeds.

• From November 2016 to November 2018, The Liquidated Company entered into finance agreements with two finance companies which stated that the goods on Hire Purchase remained those of the finance companies until all payment has been made and that the goods must not be sold until the agreements were satisfied in full;
• In January 2018 and on 31 May 2019, he signed finance agreements with two finance companies which stated that the goods are leased to The Liquidated Company and will remain the property of the finance companies;
•  On 26 November 2019 an asset which formed part of a finance agreement was sold to a third party for £22,800 and the funds were transferred to an unidentified party;
• In January 2020, he sold all remaining assets subject to finance agreements to a third party who he has failed to identify;
• Furthermore, he has failed to maintain, preserve and/or deliver up any records or provide adequate explanation to the Official Receiver that might explain what happened to the sale proceeds.

 At Liquidation, The Liquidated Company’s liabilities totalled £542,340 of which £307,942 is owed to the finance companies.