Director Disqualification for three or more offences

Case 1 – Director Disqualification for trading to the detriment of HMRC

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

Between 1 August 2017 and the date of liquidation on 23 March 2020, The Director Disqualified failed to ensure that The Insolvent Company complied with its statutory duties to file returns and make payments to HM Revenue and Customs (HMRC) in respect of VAT as and when they fell due. As a result, the disqualified director caused the insolvent company to trade to the detriment of HMRC in respect of VAT with VAT liabilities of £134,928.24, including penalties and interest, remaining overdue and outstanding as at the date of Liquidation on 23 March 2020. In that:

VAT

• The insolvent company was incorporated on 18 November 2016.
• The insolvent company registered for VAT on 3 February 2017 with a registration date of 01 January 2017.
• According to information provided to the Liquidator by The Disqualified Director, IC ceased to trade on 31 March 2018.
• The insolvent company has not filed any accounts at Companies House for any period.
• The insolvent company failed to file any VAT returns for the periods 08/17 to 08/19 inclusive (with a nil return filed for the period 11/19) and assessments were therefore raised by HMRC.
• HMRC notified The insolvent company that, following an examination of IC records, as at a calculation date of 13 September 2019, HMRC was raising additional VAT assessments in the sum of £91,505.68 (VAT of £87,472 and interest of £4,033.68) for the periods 08/17 to 08/18.
• No payments have been made in respect of any of these periods.
• HMRC subsequently notified The insolvent company that the VAT liability, as at 02 January 2020, was £135,644.79 (VAT: £95,817.00; Surcharges: £8,821.99; Penalties: £26,240; and Interest: £4,765.80).
• HMRC has submitted a claim in the liquidation in the total sum of £136,328.24 of which £134,928.24 is in respect VAT.

Comparative Treatment

• HMRC is the largest creditor in the liquidation. According to the Statement of Affairs, signed by The Director on 09 March 2020, HMRC’s liability was £109,404. However, HMRC’s VAT claim in the liquidation is £134,928.24.
• According to the Statement of Affairs, Trade and Expense creditors were only £180 (although no claims were lodged by any Trade and Expense creditors in the Liquidation).
• The Liquidator states that they have received two claims totalling £141,328.24 (HMRC for £136,328.24 of which £134,928.24 is in respect of VAT, and The Director for £5,000).
• IC operated 5 bank accounts. During the period 02 February 2017 (first transaction) and 30 April 2018, payments of £443,022.89 were received into and payments of £443,012.17 were paid out of the main account.
• During the same period (02 February 2017 and 30 April 2018), there were deposits (including cash) of £131,800.68 and payments into the main account from an Online Payment Terminal Provider of £246,670.82.

Only £4,459.02 was paid to HMRC in respect of its VAT liabilities during IC whole period trade.

Case 2 – Director Disqualification for improper accounting records, improper application for the BBL scheme and trading to the detriment of HMRC

Director Disqualified for 3 years by an undertaking agreed by the director.

The Director Disqualified caused the Liquidated Company to obtain a Government backed Bounce Bank Loan (BBL) and a BBL Top-up loan totalling £35,000 and failed to ensure the funds were used for the economic benefit of The Liquidated Company’s business, which was a breach of the terms of the Bounce Bank Loan. In that:-

•  On 10/05/2020, The Liquidated Company applied for a Bounce Bank Loan in the sum of £25,000, which was received into its bank account on 12/05/2020.
•  On 13/05/2020, The Liquidated Company paid £25,000 to The Banned Director’s business bank account.
•  On 25/03/2021, The Liquidated Company applied for a BBL top up in the sum of £10,000, which was received into its bank account on 26/03/2021.
•  On 26/03/2021, The Liquidated Company paid £10,000 to The Director’s business bank account.
•  The Banned Director has not provided any evidence to confirm that these payments made to him were for the economic benefit of the The Liquidated Company.
•  No payments have been identified as having been made by The Liquidated Company to repay the BBL.
•  The Liquidated Company’s BBL of £35,000 remained outstanding at Liquidation.
• The Director Disqualified failed to ensure The Liquidated Company maintained and/or preserved adequate accounting records, or in the alternative failed to deliver up such accounting records as were maintained to the Liquidator. As a consequence, it has not been possible to:-
•  Determine in the absence of sales invoices or other supporting documentation the sources of credits into The Liquidated Company’s bank account in the period 31/12/2019 to 13/07/2021 totalling at least £178,814.47, and in particular, whether these credits accounts for all sales made by The Liquidated Company.
•  Determine in the absence of purchase invoices or other supporting documentation the reasons for payments made from The Liquidated Company’s bank account in the period 31/12/2019 to 13/07/2021 totalling at least £241,091.21, and in particular, to verify that this was legitimate company expenditure.
•  Verify whether The Director is owed £16,615.23 by The Liquidated Company at liquidation.
•  Establish the full and true amounts due, if any, to HMRC with regards to VAT and PAYE /NIC / Corporation Tax.
•  Establish the accuracy of the statement of affairs lodged in the Liquidation.

 Verify the reasons for The Liquidated Company’s failure.

Case 3 – Director Disqualification for non-payment of tax obligations

Director Disqualified for 7 years by a director signed undertaking.

The Director Disqualified acted in breach of his fiduciary duty from at least 28 July 2015, in that he caused The Insolvent Company (IC) to enter into loan agreements with its employees as part of their remuneration packages which:

• Were high risk to IC in that whilst the loans potentially gave rise to Pay As You Earn (PAYE), National Insurance Contributions (NIC) and/ or Corporation Tax (CT), the loans were for amounts of up to £250,000, and would have required the employees to repay more than 100% of their income to IC after a 5-year period.
• Despite the high-risk nature of the loans to IC and also to the employees given the potential for assessment of PAYE, NIC and (in the case of IC, CT) they were made without any affordability or credit checks being carried out, were made with no security being taken and were made without him being aware of the information provided to the employees of IC about their contracts, expectations or obligations.
• Despite putting IC at risk of HM Revenue and Customs (HMRC) challenging the loans and assessing IC for PAYE/NIC and CT, they were loans which, in the majority of cases, were then assigned on an annual basis to a connected company registered in Anguilla for no monetary consideration or other tangible benefit, BES therefore disposing of its only tangible asset for no consideration; and/or
• Made no provision from which IC would be able to discharge any potential assessment from HMRC should a challenge be made; and/or
• When assigned to the connected company in Anguilla, the loans were assigned in return for an indemnity for IC’s uninsured losses, the value (if any) of which to IC he failed to properly or adequately consider in that he failed to analyse the potential uninsured risks and/or the ability of the connected company to meet such indemnity. The connected company was dissolved on 23 June 2018 and a winding up order was made in respect of it on 21 July 2021 with a deficiency of £19,701,055; and/or
• Were made as part of a business model used by IC and yet were made without IC taking any professional advice specific to IC or its specific circumstances, relying instead on legal advice obtained by a third party; and/or
• Were made in circumstances where he knew or should have known that there was a risk of challenge by HMRC.
• The loans were therefore not in the best interests of IC and were not likely to promote the success of IC in breach of s172 Companies Act 2006 and/or, in causing IC to make the loans on the basis set out above, he failed to act with reasonable care, skill and diligence in breach of s174 Companies Act 2006. HMRC have submitted a claim dated 29 July 2019 in the Liquidation for the sum of £4,147,625.03 in respect of company tax, RTI PAYE, VAT and interest.
• He caused or allowed IC to trade to the risk of HMRC from at least 28 July 2015, in that he caused IC to enter into loan agreements with its employees as part of their remuneration packages, which amounted to over 90% of all payments made to its employee and which gave rise to the possibility of PAYE/NIC and/or CT being due as a result and/or HMRC assessing IC for PAYE/NIC/CT as a result of those loans,
• yet failed to inform HMRC about the loan agreements; and/or
• caused IC to assign those loans to a connected company registered in Anguilla on an annual basis for no monetary consideration or other tangible benefit, thereby putting its only tangible asset out of reach of HMRC, a contingent or prospective creditor; and/or
• yet made no deduction or other provision for payment of any such taxes; and/or
• disposed of any surplus income of IC on a regular basis by paying away to connected Isle of Man companies IC’s monthly surplus net turnover, such payments being referable to the net income of IC rather than the value of any services provided by the Isle of Man companies and such payments leaving no surplus with which IC could pay any claim by HMRC, such that HMRC issued an assessment against IC for Corporation Tax of £2.7 million on 31 August 2018, which IC was unable to pay.
• He acted in breach of fiduciary duty from 28 July 2015 in that he caused IC to enter into transactions with Isle of Man companies by which IC disposed of any surplus income of IC on a regular basis by paying away to those companies IC’s monthly surplus net turnover:
• Such payments were referable to the net income of IC rather than the value of any services provided by the Isle of Man companies and amounted to profit-shifting; and/or
• Such payments had the effect of leaving no surplus with which IC could pay any claim by HMRC for PAYE/NIC and/or CT, should HMRC challenge the loans to employee.

Such arrangement/disposals were not in the best interests of IC and were not likely to promote the success of IC in breach of s172 Companies Act 2006; and/or, in causing or allowing IC to make the disposals he failed to act with reasonable case, skill and diligence in breach of s174 Companies Act 2006.

Case 4 – Director Disqualification for failure fulfill the duties as a director

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

As a director of The Liquidated Company, the Director  Disqualified failed in his statutory duties to ensure that The Liquidated Company maintained and / or preserved accounting records from the date of his appointment 14/06/16 onwards, or in the alternative he failed to deliver up such records to the Official Receiver and the Joint Liquidators. As a consequence of the lack of records, it has not been possible to:

• Establish the volume of trade carried out or identify the beneficiaries of payments.
• Establish the full nature of the Liquidated Company’s trading activities during the period of The Director’s appointment and whether these were connected with legitimate trading purposes. No records have been provided to the Official Receiver or the Joint Liquidators to confirm how The Liquidated Company was operated.
• Establish that the stock that The Liquidated Company traded in was legitimate and to account for such stock as several luxury cars and monies due to creditors remain unaccounted for. As a result the petitioner presented a winding up petition upon The Liquidated Company’s failure to pay £82,000 to the petitioner in the sale of a luxury car as its agent in the sale. The Joint Liquidators have advised the Official Receiver that there are nil assets and creditor claims to date amount to £2,524,369.
• The Liquidated Company’s bank has provided full statements. The Pound Sterling account covers the period 01/11/16 to 28/01/20 and shows transactions into the account totalling £4,204,268 and transactions out of the account totalling £4,204,268. The Euro account covers the period 18/07/18 to 27/03/19 and shows transactions into the account totalling £3,657 and transactions out of the account totalling £3,657. The Banned Director has not explained these transactions and without the company’s records the Official Receiver cannot confirm if the transactions were undertaken in The Liquidated Company’s best interests.
• Establish the correct VAT and other Taxes due to HMRC.
• Establish the level of remuneration and other benefits taken by The Director as a director of The Liquidated Company and any related tax implications.
• The Director failed in his duties as director of  The Liquidated Company to file VAT returns for periods 06/17 to 01/19 inclusive. As a result the true amounts due to HMRC in respect of VAT and other taxes in not known, although Prendiville estimates liability to be in the region of £400,000 including customs duty.

The disqualified Director failed to comply with his responsibility to file the annual return to the Financial Conduct Authority in respect of The Liquidated Company and as a consequence they withdrew its Part 4A permission under the Financial Services and Markets Act 2000.

Case 5 – Director Disqualification for failing to meet statutory obligations

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

From 5 May 2017 to 5 June 2021 The Disqualified Director failed to ensure that The Insolvent Company complied with its statutory obligations to submit timely and accurate Construction Industry Scheme (CIS) returns to Her Majesty’s Revenue and Customs (HMRC) and caused T&T to trade to the detriment of HMRC from 01 August 2019 to Liquidation, resulting in CIS losses at liquidation to HMRC totalling £289,054.

•  Companies are required to Submit monthly returns to HMRC by the 19th of every month following the last tax month on account of CIS deductions.
•  Year ending July 2018 financial accounts show IC’s CIS liability outstanding at £10,799. During this year there was a period of 8 months where no CIS returns were submitted by IC (the remaining 4 returns were nil returns).
•  IC incurred CIS liabilities of £62,196 during the year ending July 2019. During this year IC failed to submit CIS returns for 8 months. IC submitted 4 monthly CIS returns during this period disclosing liabilities of £10,202 meaning that during this year IC failed to declare £51,994 of CIS liabilities.
•  IC incurred CIS liabilities of £68,989 during the year ending July 2020. During this year 12 CIS returns were submitted by IC disclosing CIS liabilities of £49,538. The returns submitted during this period were not accurate as £19,451 of CIS liabilities were not declared.
•  Between August 2020 and Liquidation, CIS returns were submitted by IC disclosing CIS liabilities of £56,289. These returns were submitted one day before the liquidation.
•  IC’s failure to submit accurate and timely CIS returns meant that HMRC were not aware of IC’s true CIS liabilities and as a result could not take steps to enforce collection.
•  HMRC launched a compliance check and issued correspondence to IC on 11 March 2021 and 17 May 2021 requesting CIS information, no response was received.
•  As a result of the failure to respond HMRC issued determinations under S61 of the Finance Act 2004 on 22 September 2021 for tax due, for period 6 April 2017 to 21 July 2021 totalling £180,153
•  He was aware of the CIS liabilities as the increasing liability was detailed in the year-end financial accounts, 31 July 2018 listed at £10,799 ,31 July 2019 £72,995, and 31 July 2020 £141,984, those accounts being signed by him on 2 January 2019 and 20 March 2020.
•  At 31 July 2019 IC owed £185,385 to trade creditors, £72,995 to HMRC in respect of CIS, £41,084 to HMRC in respect of other taxes, he owed IC £89,531 in respect of his loan account. By the date of liquidation, the amount owed to trade creditors had decreased to £77,303 and other taxes had decreased to £40,477 while the amount owed in CIS had increased to £289,054 and the balance of his loan account had increased to £151,802. IC also owed £51,000 in respect of a Bounce Back Loan.

Bank account statements shows that from 17 October 2019 to cease of trade, receipts into the account total £2,010,295 payments out total £2,010,956 of which £1,879,255 was paid to trade creditors and expenses, £55,951 to HMRC (£20,300 of which on account of CIS) and £61,418 to him and £14,332 to the co-director.

Case 6 – Director Disqualification for trading to the detriment of HMRC

Director Disqualified for 9 years by a director signed undertaking.

During June 2020 The Insolvent Company (The Insolvent Company) applied for a Government backed Bounce Back Loan (BBL) of £50,000.00. Between 9th and 12th June 2020 The Director Disqualified caused or allowed funds totalling £32,136.44 from the loan to be used contrary to the terms of the BBL scheme from the company account for both his and his co-director’s personal benefit, with no economic benefit to the business.

•  During June 2020 the company made an application to a financial institution for a BBL in the amount of £50,000.00.
•  On 9th June 2020 the company received £50,000.00 into its bank account in relation to the BBL.
•  On 9th June 2020 five payments totalling £21,970.03 were paid out of the company bank account, for the benefit of his co Director’s personal credit cards.
•  On 9th June 2020 a payment of £9,573.84 was paid in settlement of a debt pertaining to a personally guaranteed loan relating to a separate legal entity.
•  On 12th June 2020 a payment of £592.57 was paid out of the company bank account, for the benefit of his co Director’s personal credit card.
•  During July 2020 the trading premises were vacated, and a review of the company bank account shows no trading activity after 2nd July 2020.
•  On 1st March 2021, The Insolvent Company was placed into Liquidation.
•  At Liquidation liabilities totalled £158,313.27 of which £50,000.00 is due to the financial organisation which provided the BBL and £87,853.67 due to HMRC.
•  HMRC have subsequently submitted a claim in the amount of £99,711.10 of which £83,332.77 relates to unpaid VAT.
•  The Liquidator has identified an outstanding Directors Loan due by him to The Insolvent Company in the amount of £43,736.16.
• The Banned failed to comply with his statutory duties as Director of The Insolvent Company (The Insolvent Company) to ensure that the company made timely payments as and when due to HM Revenue & Customs (HMRC) in relation to Value Added Tax (VAT) from 7th May 2017 to the cessation of trade. He caused The Insolvent Company to trade to the detriment of HMRC resulting in a liability of £70,388.77, in that:
•  The Insolvent Company registered for VAT by way of a VAT1 application received by HMRC 1st May 2015.
•  The Insolvent Company to and including VAT quarter 12/16 all returns were submitted by The Insolvent Company and payments were up to date.
•  For VAT quarter 03/17 The Insolvent Company submitted a return totalling £8,218.20. A surcharge was added in the amount of £410.91. HMRC allocated three payments against this quarter in the combined amount of £4,864.30 leaving a balance payable of £3,764.81. At the date of Liquidation this amount remained unpaid.
•  For VAT quarter 06/17 The Insolvent Company submitted a return totalling £8,866.90. HMRC allocated one payment against this quarter in the amount of £5,500.00 leaving a balance payable of £3,366.90. At the date of Liquidation this amount remained unpaid.
•  For VAT quarters 09/17 to 06/19 returns submitted by The Insolvent Company totalling £55,883.62 with applied surcharges totalling £7,373.44. At the date of Liquidation this amount remained unpaid.
•  For VAT quarters 03/20 to 12/20 assessments were raised by HMRC totalling £12,944.00. At the date of Liquidation this amount remained unpaid.
•  The last payment received by HMRC was in the amount of £750.00 on 23rd February 2018 which was allocated against outstanding liability for quarter 03/17.
•  Accounts to 30th June 2017 disclose total HMRC liabilities of £38,455, trade creditors of £21,200 and other creditors totalling £33,526.

 At Liquidation liabilities were £50,000.00 due to the financial organisation which provided the BBL, other creditors of £8,014 and £99,711.10 to HMRC of which £83,332.77 relates to unpaid VAT.

Case 7 – Director Disqualification for misuse of Bounce Back Loan Funds

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

The Disqualified Director caused The Liquidated Company (The Liquidated Company) to apply for a Bounce Back Loan (BBL) of £50,000 and he applied funds totalling £40,000 for his personal benefit and not for the economic benefit of The Liquidated Company.

•  Under the BBL scheme businesses could apply for a loan of between £2,000 and £50,000 subject to a maximum of up to 25% of turnover. The turnover figure was self-certified by the applicant. The turnover figure required was that for the calendar year 2019 or where a business was established after 1 January 2019 it is their estimated turnover. Businesses were required to use the loan only to provide economic benefit to the business, and not for personal purposes and confirm they have understood the costs associated with repayment of the loan and that they are able and intend to complete timely repayments in future.
•  The Liquidated Company was incorporated on 02 November 2016.
•  On 22 May 2020, a BBL payment of £50,000 was made to The Liquidated Company’ bank account.
•  On 25 May 2020, a payment of £40,000 was made to him from the company’s bank account.
•  On 10 July 2020 he signed notice DS01 Striking off Application by a company, which was received at Companies House on the same date.
•  He breached Section 1004 of the Companies Act 2006 as the company traded in the three months prior to submitting the application to dissolve The Liquidated Company.
•  As of 10 July 2020, the full amount of the BBL remained outstanding.

 On 13 October 2020, the company was dissolved, at which time The Liquidated Company’ bankers were creditors for £50,000, the full amount of the BBL.

Case 8 – Director Disqualification for multiple breaching including misuse of the Bounce Back Loan Scheme

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

The Disqualified Director failed to ensure that The Insolvent Company (The Insolvent Company) met its financial commitments in respect of Value Added Tax (VAT) and Corporation Tax (CT) and caused The Insolvent Company to trade to the detriment of HM Revenue & Customs (HMRC) from 07 April 2019 for VAT, through to liquidation on 16 April 2021, resulting in total liabilities of £151,486, plus surcharges and penalties totalling £14,186.

VAT Returns

• The Insolvent Company registered for VAT from 01 March 2017.
• The Insolvent Company failed to submit any VAT returns until 10 August 2018, resulting in HMRC making VAT assessments for quarter periods ending 31 May 2017 through to 28 February 2019, due to all these returns being submitted late.
• The Insolvent Company subsequently submitted VAT returns for quarter periods ending 31 May 2017 through to 31 December 2020 totalling £200,194, resulting in HMRC’s withdrawal of the VAT assessments they had made.

Payments

• The Insolvent Company made three payments on 23 July 2018 totalling £1,612 for the amount of the VAT assessments made by HMRC for quarter period ending 31 May 2017 to 30 November 2017.
• The Insolvent Company made one off payments of £12,025 on 17 July 2019, £2,695 on 31 July 2019 and £20,000 on 2 October 2019.
• The Insolvent Company made a payment of £23,047 on 15 October 2019 that supported the VAT return for quarter period ending 31 August 2019 for the same amount.
• The Insolvent Company & The Insolvent Company made payments totalling £59,379 towards the outstanding VAT liabilities.
• The payments made by The Insolvent Company to the VAT liabilities were sufficient to pay all the VAT due up to quarter period ending 30 November 2018. The remaining £1,413 was insufficient to pay the VAT return for quarter period ending 28 February 2019 reducing the amount owed for that period to £14,759.
• Consequently, the sum of £140,814 remained outstanding to HMRC in respect of VAT liability for quarter period ending 28 February 2019 (due to be paid by 7 April 2019) to 31 December 2020.
• As a result of the failure to make sufficient payments, surcharges of £17,061 were incurred, £2,975 was paid on 17 July 2019 and £14,086 remaining outstanding at the date of the liquidation.

Corporation Tax

• The Insolvent Company submitted a Corporation Tax return for the accounting period ending 05 December 2017 in the sum of £5,124, due for payment on 06 September 2018.
• The Insolvent Company submitted a Corporation Tax return for the accounting period ending 31 December 2018 in the sum of £5,548, due for payment on 01 October 2019.
• No further Corporation Tax returns were submitted, and no payments were made towards this liability, the full sum of £10,672 remaining outstanding at liquidation.
• The Insolvent Company failed to submit a Corporation Tax return for the accounting period ending 31 December 2019, and thereby incurred a £100 penalty which also remained outstanding at liquidation.

Comparable treatment of other creditors

• From 31 December 2018 to liquidation the sum due to other creditors increased by £50,067 as a consequence of the company taking out a BBL which was not repaid. Over the same period the amount owed to HMRC increased by £98,765.
• Analysis of company bank statements for the period 06 September 2018 to 16 April 2021 shows payments to trade/ expense creditors of £1,250,965, subcontractor payments of £625,513, net sums paid to The Banned Director/ personal expenditure of £140,323, wages of £25,622 and cash withdrawals of £20,186.
• Over the same period the net sum of £66,923 was lost on gambling sites and trading platforms .

At liquidation the HMRC claim amounts to £167,311, adjusted for the trading period, whilst the known amount due to other creditors totals £53,157, of which £50,000 relates to the BBL.

Case 9 – Director Disqualification for trading to the detriment of the crown

Director Disqualified for 9 years by a director signed undertaking.

The Director Disqualified, the sole director of the Liquidated Company on liquidation, failed to ensure that the Liquidated Company maintained or preserved adequate accounting and administrative records, or alternatively has failed to deliver up all such that did exist. In that:

•  He was appointed as the director of the Liquidated Company on 8 January 2021 and from 27 January 2021 remained sole director of the Liquidated Company from this date up until liquidation.

Records delivered up

• He provided administrative and accounting records to the Liquidator on liquidation which comprise of limited sales invoices (approximately 100), insurance documents, limited subcontractor monthly CIS statements, bank mandate and signatory documents, copies of identification and signatures, a VAT status certificate and bank statements.
• The available sales invoices delivered up to the Liquidator on liquidation record sales totalling £479,476.69 69 between 5 February 2021 and liquidation.
• the Liquidated Company bank statements record income in the total sum of £2,450,985.01 was received during this period.
•  CIS returns were filed in respect of Months 11 and 12 of tax year 2020/21 and Months 1-3 of tax year 2021/11, which were all received by HMRC on 7 June 2021.
•  The level of income as evidenced by the available sales invoices delivered up in the sum of £479,476.69 is not consistent with the level of credits received into its bank account totalling £2,400,824.54
•  Payments made to subcontractors recorded in the CIS returns filed totalled £2,623,792.00.
• In the absence of full accounting records it is not possible to ascertain:
•  The full and true amounts due to HMRC in relation to all taxations, most particularly in relation to CIS. At liquidation HRMC have claimed £532,800.05 due
•  Who the company’s customers were, where sales invoices only total £479.476.69 whilst income in the bank account totalled £2,400,824.54
•  In the absence of full employee records including time sheets, who the individuals described as employees were and under which contract they were assertedly working
• Who benefitted from the company expenditure
• Establish the bona fides of the company activities

HMRC

• b) The Banned Director failed to ensure that the Liquidated Company complied with its obligations to file returns and make payments to HMRC on time and as a result caused the Liquidated Company to trade to the detriment of HMRC between 5 February 2021 and 4 June 2021. In that:
•  He purchased the Liquidated Company from its previous owner with effect from 5 February 2021
• The Liquidated Company had a turnover of £7,373 in the year to 31 March 2020, had been inactive since that date and had obtained a full Bounce Back Loan of £50,000 in October 2020, which remained in the company bank account on his purchase of the company
• Between 5 February 2021 and 4 June 2021 the Liquidated Company received £2,400,824.54 into its bank account
•  Between 5 February 2021 and 4 June 2021 the Liquidated Company made payments totalling £2,450,985.02 from its bank account
•  The Liquidated Company made two payments to HRMC on account, in relation to accruing CIS, being £5,168.90 on 12 April 2021 and £5,812 on 11 May 2021
•  On 29 April 2021 HMRC wrote to the company requesting an explanation for the missing workforce after identifying a substantial mismatch between payments received from contractors (£620,263 from 6 January 2021 to 5 April 2021) and payments out to subcontractors (£38,056 from 6 February 2021 to 5 April 2021)
•  On 5 May 2021 he telephoned HMRC asserting his accountant does everything but declined to provide details of that accountant
•  On 7 June 2021 the Liquidated Company filed CIS returns in respect of Months 11 and 12 of tax year 2020/21 and Months 1-3 of tax year 2021/11. Payments made to subcontractors recorded in those CIS returns filed totalled £2,623,792.00
•  On 21 June 2021 the Liquidated Company was placed into voluntary liquidation
•  Construction Industry Scheme liabilities in the sum of £532,800.05 remained outstanding and overdue on liquidation dating back to Month 11 of tax year 2020/21 (and which became overdue due for payment by 22 March 2021).

Summary

He took over a small company that was not active and caused it to absorb the taxation cost of labour without adequate pricing of jobs to enable any associated tax (CIS) liabilities to be discharged.

Case 10 – Director Disqualification for trading while knowingly insolvent

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

From 7 March 2016 The Director Disqualified failed to ensure that The Insolvent Company complied with its statutory obligations to submit returns on time and make payments in full to HMRC in respect of VAT and PAYE/NIC. The Insolvent Company also traded to the detriment of HMRC in respect of VAT and PAYE/NIC from at latest 1 November 2017, at a time when it was insolvent. In that:

•  The Insolvent Company submitted 11 VAT returns covering the period ending 01/16, first due 7 March 2016, to 07/18 declaring a total of £118,247 due for payment. Of these returns none were paid in full and only £10,594 was paid, leaving £107,653 outstanding.
•  The Insolvent Company failed to submit returns for the 5 VAT periods from 10/18 to 10/19. HMRC raised assessments totalling £42,033 and nothing was paid towards these sums.
•  PAYE/NIC remains outstanding in full or part for 20 monthly periods from September 2017 to October 2019. In respect of these specific periods £47,984 (including surcharges) was due, of which £8,459 was paid, leaving £39,525 outstanding.
•  HMRC file notes show that the Company has been in financial difficulties since 19 September 2016 when a Time to Pay Agreement was declined by HMRC as the Company was unable to meet the minimum repayments to clear all outstanding PAYE/NIC and VAT arrears within 12 months.
•  Accounts filed at Companies House for the period ending 31 October 2017 and signed off by her on 30 July 2018 showed that The Insolvent Company was insolvent with a deficiency of assets over liabilities of £121,672
•  The Insolvent Company’s bank statements from 01 November 2017 to 30 August 2019 show that having received credits in the region of £381,000 she made payments to HMRC of only £5,500 in respect of the Company’s PAYE/NIC that had been outstanding since the year ending 2015/2016

 HMRC have claimed a total of £218,643 (including surcharges and interest) in respect of VAT and PAYE/NIC at liquidation and HMRC make up over 50% of all creditors.

Case 11 – Director Disqualification for trading to the detriment of creditors, among other offences

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

The Banned Director caused The Insolvent Company to apply for a £50,000 Bounce Back Loan, (BBL), which was deposited into The Insolvent Company bank account on 26 May 2020, and a £149,000 Coronavirus Business Interruption Loan, (CBIL), which was deposited into The Insolvent Company bank account on 02 July 2020 and failed to use all these funds for the economic benefit of the business, contrary to the terms of the schemes, which caused detriment to creditors of The Insolvent Company in that:

•  The last unaudited, abridged, accounts lodged at Companies House for year ending 30 April 2020 record a trading loss of £7,105.
•  On 4 May 2020 HM Treasury launched BBLs to enable small businesses to apply and receive 100% government backed loans of between £2,000 and £50,000 via an online application process.
•  On 26 May 2020, a £50,000 BBL was deposited into ROL’s bank account, giving a credit balance of £106,162.
•  The terms and conditions of the loan stated that it was to be used only to provide economic benefit to the business, and not for personal purposes.
•  Between 28 May and 01 June 2020, a total of £50,000 was withdrawn in 4 payments from IC bank described as Dividend and understood to be to him and 3 connected parties/shareholders and £2,500 to another shareholder. (These payments were made 10 days after identical payments were made to the same recipients).
•  Between 09 June and 15 June 2020, £40,000 was transferred to IC pension fund.
•  On 12 June 2020, £7,616 was paid out of IC bank account recorded as Directors Loan.
•  The above payments amount to £100,116, out of total payments out of IC bank account in this period amounting to £143,724.
•  On 23 March 2020, CBILs were introduced, designed to provide financial support to smaller businesses across the UK that were losing revenue, and seeing their cashflow disrupted, due to the COVID-19 outbreak.
•  On 02 July 2020, a £149,000 CBIL was deposited into the bank account of The Insolvent Company, leaving a balance of £206,690.
•  Between 17 July and 10 August 2020, a total of £149,000 was transferred to a connected company, of which he and an associate were recorded as joint directors.
•  Between 09 and 16 July 2020, a further £40,000 was transferred to The Insolvent Company pension fund.
•  The above payments amount to £289,116, out of total payments out of The Insolvent Company bank account in this period amounting to £369,005.
•  Professional advice was sought on 30 September 2020 and The Insolvent Company entered into Creditor Voluntary Liquidation on 10 November 2020.

 On the date of Liquidation, the Statement of Affairs recorded a deficiency of £469,674, with creditors totalling £472,535, including £200,000 owed in respect of the BBL and CBIL

Case 12 – Director Disqualification for failure to meet fiduciary duties, among other offences

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

The Director Disqualified breached his duties as a director of The Insolvent Company by failing to ensure that it complied with legislative requirements in that:-

• The Insolvent Company did not comply with its statutory obligations under The Immigration, Asylum and Nationality Act 2006 by employing 3 illegal workers.
• Following a visit from Home Office Immigration Officers on 13/11/2019, during which these breaches were discovered, The Insolvent Company was issued with a penalty notice for £45,000 which remains unpaid.
• The Director was the sole person in office as a director of the company at the time of the Home Office visit.
• The Director failed to ensure The Insolvent Company maintained and/or preserved adequate accounting records, or in the alternative failed to deliver up such accounting records as were maintained to the Joint Liquidators. As a consequence, it has not been possible to:-
• Determine in the absence of sales invoices or other supporting documentation the sources of credits into The Insolvent Company’s bank accounts in the period 01/10/2019 to 07/05/2021 totalling at least £1,573,760.01, and in particular, whether these credits accounts for all sales made by The Insolvent Company.
• Determine in the absence of purchase invoices or other supporting documentation the reasons for payments made from The Insolvent Company’s bank accounts in the period 01/10/2019 to 07/05/2021 totalling at least £1,567,089.73
• and in particular, to verify that this was legitimate company expenditure.
• Establish the full and true amounts due to HMRC with regards to VAT and PAYE /NIC / CIS/ Corporation Tax.
• Establish the accuracy of the statement of affairs lodged in the Liquidation.
• Verify the reasons for The Insolvent Company’s failure.

Case 13 – Director Disqualification for transactions to the detriment of HMRC, among other offences

Director Disqualified for 7 years by an undertaking agreed by the director.

The Director Disqualified caused or allowed The Insolvent Company hereinafter referred to as The Insolvent Company) to trade to the detriment of HMRC in respect of CIS, PAYE/NI from 1 April 2019 and in respect of VAT from 7 May 2020, so as at the date of Liquidation on 7 July 2021 The Insolvent Company had an outstanding liability with HMRC of at least £468,452.20.

PAYE:

• As at 31st March 2019 The Insolvent Company had submitted returns and made payments to HMRC in respect of PAYE/NI/CIS so that £62,158.64 remained outstanding.
• Between 1 April 2019 and July 2021 The Insolvent Company deducted £379,664.09 of PAYE and £51,611.49 of CIS that was due to be paid over to HMRC. A further £5,426.45 was incurred related to interest, penalties and charges resulting in a total of £436,702.03 being due to be paid to HMRC throughout the period.
• Between 1 April 2019 and July 2021 The Insolvent Company had Employer Payment Submission deductions totalling £136,921.42 that would be deducted from the amount owing to HMRC. £3000.00 of Employment Allowance was also deducted during the period.
• The Insolvent Company made payments totalling £39,666.75 towards the amounts outstanding to HMRC between 1 April 2019 and July 2021 so as at the date of Liquidation £319,272.50 remained outstanding to HMRC in respect of PAYE/NIC and CIS.

VAT

• For all periods from 01/13 to 12/19 (29 periods) Returns were submitted mostly on time and all payments made in full.
• For periods 03/20 to 03/21 (5 periods) 3 returns were submitted totalling £91,550.75. Surcharges totalling £2,954.45 were levied relating to those returns. No payments were made towards those returns or surcharges.
• During the same period 2 assessments were raised by HMRC as no returns were submitted and those assessments totalled £49,956.00. Surcharges totalling £4,718.50 were levied relating to those assessments. No payments were made towards the assessments or the surcharges.
• As at the date of Liquidation The Insolvent Company had incurred a liability in respect of VAT with HMRC of £149,179.70

Comparative treatment:

• Finalised accounts for the year ending 31 March 2019, show trade and other creditors were £174,228 and reduced to £76,238 as at the date of liquidation. Taxation and Social Security creditors were stated as £152,576, which increased to £468,452.20.
• Between 01 April 2019, being the first day after the last set of accounts filed at Companies House and 09 July 2021, the date of liquidation, excluding contra entries, £3,220,440.56 was paid out of the bank account. Of which;
• £1,507,986.44 was paid to trade and for business expenses;
• £860,895.42 was paid for wages;
• £301,808.00 has been transferred to other company accounts,
• £209,125.53 has been paid in direct payments to The Director or for what appears to be to his benefit;
• £122,971.16 has been paid in direct payments to Richard Berry or for what appears to be to his benefit; while

£166,056.81 has been paid to HMRC.

Case 14 – Director Disqualification for transactions to the detriment of HMRC, among other offences

Director Disqualified for 8 years by a director signed undertaking.

Between 04 May 2020 and 05 May 2020, The Director Disqualified caused The Insolvent Company to apply for a Bounce Back Loan (BBL) of £50,000 and to then pay the full amount to a third party, which was to the detriment of HM Revenue and Customs (HMRC), in that:

• On 04 May 2021, The Director applied for a BBL of £50,000 on behalf of The Insolvent Company .
• On 05 May 2021, The Insolvent Company received £50,000 into its bank account from the BBL lender and on the same day, The Insolvent Company paid £50,000 to a third party. The Director has advised that the £50,000 payment was made to a connected company.
• The Banned Director has failed to provide any evidence that the £50,000 BBL funds paid to a connected company were used for the economic benefit of The Insolvent Company , which was a requirement of the BBL scheme.
• At the date of liquidation, The Insolvent Company had liabilities of £775,188, which included £469,140 due to HMRC, comprising of PAYE/NIC totalling £274,481, VAT of £194,116, CT of £200 and a National Minimum Wage penalty of £343.

The last payment made by The Insolvent Company to HMRC in respect of PAYE/NIC was a payment of £3,000 on 25 February 2020. The Insolvent Company has not made any payments in respect of VAT, despite VAT liabilities having been due since 07 November 2017.

Case 15 – Director Disqualification for trading to the detriment of HMRC, among other offences

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

Between 30 June 2019 and 31 March 2021 (when trading ceased), The Director Disqualified failed to ensure that The Insolvent Company complied with its statutory obligations to file Value Added Tax (VAT) returns and make payments when due, to HM Revenue & Customs (HMRC); and caused The Insolvent Company to trade to the detriment of HMRC:

• The Insolvent Company registered for the Annual Accounting Scheme for VAT with effect from 1 March 2019.
• The Insolvent Company failed to submit the 05/19 and 05/20 VAT returns when they were due on 30 June 2019 and 30 June 2020 therefore HMRC issued assessments for £531 and £1,672 respectively.
• When using HMRC’s suggested flat rate scheme of 20%, the estimated amount of VAT due is £276,036 based on the income received into The Insolvent Companys bank account.
• The Insolvent Company failed to make monthly payments to HMRC in respect of VAT, the only payment made was £531 on 8 November 2019.
• In comparison, between 14 June 2019 and 31 March 2021 payments totalling £1,380,183 were credited to The Insolvent Companys bank account and used to pay other creditors.

HMRC have submitted a claim in the liquidation for £128,121 for CIS, National Insurance, VAT and interest and charges. The only other creditor was a £50,000 Bounce Back Loan.

Case 16 – Director Disqualification for non-payment of VAT, among other offences

Director Disqualified for 3 years by an undertaking agreed by the director.

The Banned Director failed to ensure that The Insolvent Company (IC) complied with its statutory duties to pay VAT and Corporation Tax (CT) due to HM Revenue and Customs (HMRC) and caused IC to trade to the detriment of HMRC from 07 May 2019 in respect of VAT and 01 January 2018 in respect of CT until liquidation on 23 June 2020. As a result, HMRC liabilities estimated in the sum of at least £98,149.46 remained overdue and outstanding on liquidation. In that:

VAT

•  IC was incorporated on 21 March 2007 and registered for VAT on 21 March 2007.
•  HMRC’s VAT claim in the liquidation is £48,467.38 (tax of £47,301.13 and surcharges of £1,166.25).
•  IC VAT liabilities for the period 12/18 were discharged in full. The liabilities for the period 03/19 were only discharged in part. The remaining liability for the period 03/19 was due for payment on 07 May 2019.
•  IC failed to file VAT returns on time for the period 09/19 or at all for the periods 03/20 and 06/20.

CT

•  The CT Return for the period ending 31 March 2017 was filed on 22 March 2018 (due on 31 March 2018) which recorded CT due of £43,564.40. Only £31,721.88 was paid (due for payment in full by 1 January 2018) and therefore £11,842.52 was outstanding for the period ending 31 March 2017.
•  The CT Return for the period ending 31 March 2018 was filed on 25 March 2019 (due on 31 March 2019) which recorded CT due of £33,948.25. No payments were made in respect of CT for the period ending 31 March 2018, and which were due by for payment in full by 1 January 2019.
•  HMRC’s CT claim in the liquidation is £45,990.77 with interest of £3,372.55 (which totals £49,363.32).
•  The CT liability for the period ending 31 March 2017 was due for payment on 01 August 2018.

Comparative Treatment

•  HMRC is the largest creditor in the liquidation with a total claim of £98,149.49.
•  IC had two bank accounts. During the period May 2018 and June 2020, the bank statements for IC main account record that payments of £477,515.95 were received and £470,716.53 was paid out. The majority of payments received into IC main account (which totalled £447,076.50) were from a company connected to The Director. During the same period (May 2018 and June 2020):
• o 34 payments totalling £133,000 were made to The Banned Director;
• o 126 payments totalling £224,850 were made to “the director and the co-director”; and
• o 16 payments totalling £53,086.20 were made to HMRC.
•  During the period May 2018 to June 2020, the bank statement for IC second account record that payments of £16,150.13 were received and £16,205.15 were paid out. During the same period (May 2018 to June 2020):
• o 13 payments totalling £13,012 were made to the reference Director Cons; and
• o no payments were made to HMRC.
•  Creditors in IC Statement of Affairs (other than HMRC) were a vehicle finance company (£18,468.34) and a trade creditor (£3,600). As at 25 February 2022, with the exception of HMRC’s proof of debt, the Liquidator has not received any other proof of debt in the liquidation.

DLA

•  The Liquidator has calculated that there is an outstanding Directors Loan Account (DLA) of £231,510 owed to IC by The Banned Director.
•  The outstanding DLA in the Statement of Affairs (signed by The Director on 10 June 2020) was stated to be £67,578.04 (which is the DLA figure in IC accounts for the period ending 31 March 2019). The outstanding DLA in the period ending 31 March 2018 was £40,882.

 Therefore, the DLA has increased by £163,931.96 in the period 1 April 2019 to the liquidation on 23 June 2020.

Case 17 – Director Disqualification for trading while knowingly insolvent, among other offences

Director Disqualified for 10 years by a director signed undertaking.

The Director Disqualified caused The Insolvent Company (The Insolvent Company) to breach the terms & conditions of the Bounce Back Loan (BBL) Scheme by applying for a BBL loan that The Insolvent Company was not entitled to resulting in the company receiving a BBL of £50,000 when she knew or ought to have known the The Insolvent Company was not eligible for a loan and by applying £33,027 of the BBL funds for the personal benefit and not for the economic benefit of The Insolvent Company. In that:

• The Insolvent Company was incorporated on 10 September 2019. The terms of the BBL scheme were that a company incorporated after 01 January 2019 could base an application for a BBL on estimated annual turnover but conditional that the company was trading on 01 March 2020. The Insolvent Company was not trading at that date so was not entitled to apply for a BBL.
• BBL Scheme conditions also stated that for a business to apply for a loan, the turnover figure, even if self-certified by the applicant with no checks or evidence required, could not be over-estimated by more than 25% in order to obtain a larger loan;
• In September 2020, The Banned Director applied for a BBL of £50,000 on behalf of The Insolvent Company.
• On 18 September 2020, funds of £50,000 were credited to The Insolvent Company’s bank account.
• The first activity on The Insolvent Company’s bank account was the deposit of the BBL funds on 18 September 2020.
• The Banned Director has stated that no sales invoices were raised by The Insolvent Company prior to the BBL money being received.
• On 14 April 2021, The Director signed but did not submit micro accounts for The Insolvent Company for the period 10 September 2019 to 30 September 2020. The accounts stated a turnover of £19,815. No supporting sales invoices have been produced.
• Even had The Insolvent Company been trading and entitled to apply for a BBL the maximum permissible BBL based on the stated turnover would have only been £4,953.
• At the date of the Liquidation on 14 December 2020, a total of £50,001 was owed to creditors, of which £50,000 was the bounce back loan and £1 was owed to HMRC.
• Between 21 September 2020 and 21 July 2021, a total of £33,027 was transferred to The Director’s personal account from The Insolvent Company’ bank account. Ghabhdan has stated this was not for the economic benefit of The Insolvent Company.
• From 10 September 2019 when The Insolvent Company was incorporated, The Director failed to ensure that The Insolvent Company maintained or preserved adequate accounting records or in the alternative failed to deliver up such records to the liquidator. In the absence of any account accounting records delivered up to the Liquidator it has not been possible to;
• Establish that The Insolvent Company was actually trading at 01 March 2020.
• Establish the dates of and sources of sales totalling £19,815 declared in The Insolvent Company’s year- end accounts to 30 September 2020.
• Establish the dates and full details of purchases declared in The Insolvent Company’s year -end account to 30 September 2020.
• Verify the quantum of the director loan account
• Verify the £33,027 The Banned Director withdrew from the The Insolvent Company’s bank account, in electronic transfers between 21 September 2020 and 21 July 2021 was used for the economic benefit of The Insolvent Company.
• Verify the true asset position of the company at liquidation as declared as Nil on the statement of affairs signed by The Director on 16 September 2021.
• Verify the true deficiency of the company at liquidation as the statement of affairs signed by The Disqualified Director on 16 September 2021 stated there being only two creditors totalling £50,001.

Case 18 – Director Disqualification for transactions to the detriment of creditors, among other offences

Director Disqualified for 10 years by Order of the Court.

The Director Disqualified caused or allowed  The Insolvent Company (‘IC’) to make payments totalling £58,702 at a time when he knew or ought to have known IC was insolvent, which were to the detriment of creditors and to the benefit of IC’s directors, in that:

•  A Winding Up Petition against IC was presented to the court on 21 September 2020. There were three petitioning creditors who were owed a combined £22,345.
•  The Winding Up Petition was served upon IC on 25 September 2020.
•  Between 22 September 2020 and 24 December 2020, payments totalling £46,272 were paid to him.
•  Between 22 September 2020 and 24 December 2020, payments totalling £12,430 were paid to his co-director.
•  Between 22 September 2020 and 24 December 2020 no payments were made to the three petitioning creditors and consequently a Winding Up Oder was made against IC on 18 January 2021.
• Accounting Records:
• He failed to ensure that from at least January 2020 to 18 January 2021 IC Cooling The Insolvent Company (‘IC’) maintained and/or preserved adequate accounting records, or he failed to deliver up to the liquidator/Official Receiver such records as were maintained, with the consequence it has not been possible to:
•  Determine whether book debts of £34,800 are still owed to IC, and whether these funds are recoverable.
•  Evidence whether IC correctly claimed Covid Job Retention Scheme (CJRS) funds, resulting in an assessment being raised against the company by HMRC of £64,428.
•  Determine whether debit card transactions totalling £56,004 were used in the normal course of business
•  Determine whether cash withdrawals totalling £9,283 were used in the normal course of business.
• Determine whether on-line banking bill payments totalling £31,108 were made in the normal course of business.

Case 19 – Director Disqualification for transactions to the detriment of HMRC, among other offences

Director Disqualified for 3 years by an undertaking agreed by the director.

The Director Disqualified caused The Insolvent Company (The Insolvent Company) to trade to the detriment of HM Revenue & Customs (HMRC) in respect of Value Added Tax (VAT), from at least 7 September 2018 when liabilities for Period 07/18 fell due to be paid, Corporation Tax, from 1 September 2016 when liabilities for Year ended 30 November 2015 fell due to be paid, and Pay as You Earn Income Tax (PAYE) and National Insurance Contributions (NIC), from 22 April 2019 when liabilities for Tax Year 2018/2019 fell due to be paid, resulting in liabilities of at least £63,184 at Liquidation. In that:-

VAT

• The Insolvent Company was registered for VAT with effect from 1 May 2018.
• Returns were submitted on behalf of The Insolvent Company for the Periods 07/18 to and including 04/21 in the total sum of £37,380, for which no payment was made to HMRC.
• No return for the period 07/21 was submitted on behalf of The Insolvent Company and subsequently HMRC raised an assessment in the sum of £3,177, for which no payment was made.
• Surcharges were incurred for the Periods 10/19 to 01/20 and 07/20 to 07/21 in the total sum of £4,403, for which no payment was made.
• According to HMRC’s claim the earliest VAT liability is £3,656 for Period 07/18, which should have been paid in full by 7 September 2018.
• At Liquidation a total of £44,960 remains due in respect of The Insolvent Company’s VAT liabilities.

Corporation Tax

• A return for the Period Ended 30 November 2015 was submitted on behalf of The Insolvent Company, which showed £2,068 was due for Corporation Tax. Interest of £44 was subsequently incurred. The Insolvent Company made a payment of £2,068 against this liability. The sum of £44 remains due at Liquidation for this period.
• Returns for the Periods Ended 30 November 2016 to 30 November 2018 were submitted on behalf of The Insolvent Company, which showed that the total sum of £11,087 was due for Corporation Tax. No payment was made against this liability and the sum of £11,087 remains due at Liquidation for this period.
• A return for the Period Ended 30 November 2019 was submitted on behalf of The Insolvent Company, which showed £2,557 was due for Corporation Tax. A penalty of £100 was subsequently incurred. No payment was made against these liabilities and the sum of £2,657 remains due at Liquidation for this period.
• According to HMRC the earliest Corporation Tax liability is £44 for the Year Ended 30 November 2015, which should have been paid in full by 1 September 2016.
• At Liquidation a total of £13,788 remains due in respect of The Insolvent Company’s Corporation Tax liabilities.

PAYE and NIC

• For the Tax Year 2018/2019 PAYE & NIC returns were submitted in the total sum of £2,224. No payments were made against this liability, although The Insolvent Company was in receipt of an Employment Allowance in the sum of £918. The sum of £1,306 remains due at Liquidation for this period.
• For the Tax Year 2019/2020 PAYE & NIC returns were submitted in the total sum of £1,871. No payments were made against this liability, although The Insolvent Company was in receipt of an Employment Allowance in the sum of £927. The sum of £944 remains due at Liquidation for this period.
• For the Tax Year 2020/2021 PAYE & NIC returns were submitted in the total sum of £2,186. No payments were made against this liability and the sum of £2,186 remains due at Liquidation for this period.
• According to HMRC the earliest PAYE & NIC liability is £2,225 for period 2018/2019, which should have been paid in full by 22 April 2019.
• At Liquidation a total of £4,436 remains due in respect of The Insolvent Company’s PAYE & NIC liabilities.

Comparative Treatment

• Bank statements show that for the period commencing 23 July 2019 (the earliest date for which bank statements have been recovered) until Liquidation, £586,344 was expended from the company’s bank account. HMRC have confirmed that it had not received any monies in respect of The Insolvent Company’s Crown liabilities during this period.

The Insolvent Company’s Accounts as at 30 November 2019 show Crown liabilities as totalling £14,400, whilst all other creditors total £42,933. By the Liquidation the Crown liabilities had increased to at least £63,184, an increase of £48,784. All other creditors had increased to at least £56,517, an increase of £13,584.

Case 20 – Director Disqualification for transactions to the detriment of creditors including HMRC, among other offences

Director Disqualified for 4 years by a director signed undertaking.

In May 2020 The Banned Director permitted The Insolvent Company to obtain a Government-backed Bounce Back Loan (‘BBL’) of £50,000, which was paid into its bank account on 05 May 2020. The loan was not used for the economic benefit of the business, contrary to the terms of the BBL, and the payments made from it were to the detriment of other outstanding creditors, including HM Revenue & Customs (‘HMRC’). In that:

• On 04 May 2020 The Insolvent Company bank account was overdrawn by £108;
• On 05 May £50,000 was paid into the account;
• On 11 May two payments were made to a connected company, of £29,175 and £12,351;
• On the same day a payment of £6,500 was made to an individual which The Director’s co-director has advised was in repayment of a loan;
• At the date of the liquidation, 15 July 2020, HMRC was owed £217,248 of which:
• PAYE/NIC of £110,890 was outstanding dating from the tax year 2018/19, due for payment by 22 April 2019 ; and
• VAT of £84,156 was owed dating from the quarter ended June 2019;
• Trade and expense creditors on the statement of affairs were owed £56,809 and the earliest outstanding invoice dated from June 2018.

No payments were made to HMRC or any of the creditors on the statement of affairs after the date the BBL was received.

Case 21 – Director Disqualification for transactions to the detriment of HMRC, among other offences

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

The Director Disqualified caused The Insolvent Company (The Insolvent Company) to trade to the detriment of HM Revenue & Customs (HMRC) in terms of Value Added Tax (VAT) from at least 07 June 2018 until compulsory liquidation and in terms of Pay as You Earn (PAYE) from 22 November 2018 until liquidation, by failing to make returns and pay HMRC as and when due whilst making payments to other creditors. As a result, at liquidation, The Insolvent Company had outstanding liabilities of £469,390 in respect of VAT and £174,157 in respect of PAYE in that:

VAT

•  On 06 April 2018 The Insolvent Company made a payment for £7,356 that cleared, in full, the VAT return for month ending 28 February 2018. Following that payment, The Insolvent Company owed £80,022 in unpaid VAT and surcharges.
•  The Insolvent Company made a further 20 returns (11 of which were submitted late) totalling £206,544 and VAT claims for months ending 31 March and 30 November 2019. The Insolvent Company did not file a return for month ending 31 January 2020 and an assessment totalling £3,634 was raised by HMRC.
•  Between 13 April 2018 and 27 June 2019, The Insolvent Company made 16 payments totalling £79,780, the last payment being for £5,806, and received claims offset against VAT liabilities of £3,883.
•  HMRC wrote to the company on 06 February 2019 to inform them of a proposed visit on 14 March 2019 to check the company’s VAT records for the last 4 years. Following the visit, HMRC issued a Notice of Assessments to The Insolvent Company, calculated on 01 August 2019, which stated that the examination of the company records showed The Insolvent Company had not declared or assessed the correct amounts of VAT. An Officer’s assessment was raised for £82,872 due for immediate payment in full. Two further officer assessments, on 04 October 2019 and 20 January 2020, resulted in assessments totalling £131,840 but no payments were made.
•  Between 06 April 2018 and liquidation, HMRC applied interest, penalties and surcharges totalling £51,775.
•  At liquidation The Insolvent Company owed £469,390. Post liquidation, HMRC raised net interest of £589 and assessments of £3,750 for months ending 28 February 2020 and 31 March 2020 (which are discounted for the purpose of this allegation) giving rise to a claim of £477,363 in respect of VAT.

PAYE

•  The Insolvent Company made a PAYE RTI return for October 2018 of £14,026, due for payment on 22 November 2018, at which date the liability was £72,261. There were no payments made in respect of this. The last payment was on 01 November 2018.
•  The Insolvent Company submitted 17 further returns, until 05 April 2020, recording liabilities totalling £260,995. The Insolvent Company received credits for £39,368 from HMRC but made no payments after 01 November 2018.
•  At liquidation HMRC claimed The Insolvent Company owed £174,157.

Time To Pay Agreement (TTP)

•  On 24 May 2018, HMRC wrote to The Insolvent Company to confirm the TTP agreement for £4,673 per week starting 08 June 2018 until 08 February 2019 to cover liabilities of £168,229 for PAYE, Corporation Tax and VAT. The Insolvent Company was required to make ongoing tax liability payments as and when due.
•  HMRC records show the first payment was made on 07 June 2018 and The Insolvent Company made 25 payments totalling £117,336, the last one being on 18 December 2018 totalling £4,673. Of those payments, 18 TTP payments were allocated to PAYE and 7 payments to VAT.
•  The Insolvent Company failed to make payments to the ongoing tax liabilities when due. Records show, during a call, HMRC informed The Insolvent Company on 13 December 2018 the TTP was in default. After that date, no further payments were allocated towards PAYE liabilities, and 7 payments, totalling £34,911, were allocated against VAT

Detrimental Treatment

•  Abbreviated accounts for the year ended 30 April 2018 show The Insolvent Company had trade creditors totalling £321,686 and finance creditors of £740,027. By comparison, at liquidation, The Insolvent Company owed £254,931 to trade and £174,100 to finance creditors. By comparison HMRC were owed £80,022 in VAT at 07 April 2018 which increased to £469,390 at liquidation, and £72,261 to PAYE at 22 November 2018, which increased to £174,157 at liquidation.
•  Over the period 06 April 2018 until liquidation bank statements show 37 creditors, owed £429,032 at liquidation, were paid £673,949, of which £157,802 was paid after 27 June 2019. Herself and connected parties received (excluding wages) £315,677 of payments. At liquidation, she was a creditor in the amount of £45,403.

 By comparison VAT received £79,780 over the period 06 April 2018 until liquidation. PAYE received £101,620 between 06 April 2018 and liquidation but made no payments from 02 November 2018 to liquidation.

Case 22 – Director Disqualification for failure to comply with statutory duties, among other offences

Director Disqualified for 7 years by a director signed undertaking.

The Banned Director failed to ensure that The Insolvent Company complied with its statutory duties to file returns either on time, or in some instances not at all, and make payments to HM Revenue and Customs (HMRC) as and when they fell due , causing IC to trade to the detriment of HMRC from at least 07 December 2017 in respect of VAT and least 22 August 2018 in respect of PAYE/NIC until liquidation on 24 February 2020. As a result, HMRC’s liabilities estimated in the sum of at least £68,687.40 in respect of VAT and £73,402.82 in respect of PAYE/NIC remained overdue and outstanding on liquidation. In that:

VAT

• IC was incorporated on 03 October 2014.
• IC registered for VAT on 10 January 2015 with a stated registration date of 01 November 2015.
• IC accountants (the accountants) wrote to HMRC on 10 October 2017 to notify that the 01 November 2015 registration date was incorrect. The registration date was changed by HMRC to 01 June 2015.
• IC failed to file VAT returns on time from the periods 01/16 to 10/18 or at all from the period 01/19.
• HMRC raised assessments for periods 01/19, 04/19, 07/19, 10/19, 01/20 and 04/20. The assessments for the periods 01/19, 04/19, 07/19 and 10/19 (together with surcharges) totaled £19,554.60.
• HMRC’s VAT claim in the liquidation is £68,687.40 (VAT of £60,339.69 and surcharges of £8,347.71).
• When the payment credits are allocated to the earliest liabilities, the liabilities for the period 07/17 are discharged in full. The liabilities for the period 10/17 were only discharged in part. The remaining liability for the period 10/17 was due for payment on 07 December 2017.

PAYE/NIC

• HMRC’s PAYE/NIC claim in the liquidation is £73,402.82.
• When the payment credits are allocated to the earliest liabilities, the liabilities for Month 4 of 2018/19 are discharged in full. The liabilities for Month 5 of 2018/19 (to 5 August 2018) were only cleared in part. The remaining liability for Month 5 of 2018/19 was due for payment on 22 August 2018.

Comparative Treatment

• HMRC is the largest creditor in the liquidation with a total claim of £143,192.62 (£142,290.22 plus dismissed costs of £902.40).
• IC accounts for the years ended 31 January 2017 and 2018 record HMRC was owed £36,589 (2017) and £87,273 (2018).
• IC Statement of Affairs record that trade creditors were owed the sum of £40,108 in the liquidation. BTC’s accounts for the years ended 31 January 2017 and 2018 record other creditors were owed £28,335 (2017) and £5,385 (2018) respectively.

From 07 December 2017 to liquidation on 24 February 2020, BTC’s bank account received credits totaling £2,557,806 and expended £2,446,274 (excluding payments to HMRC). During the same period, HMRC records payments of a total of £107,221 of which £71,603 were made in respect of VAT and £35,618 in respect of PAYE/NIC.

Case 23 – Director Disqualification for not completing company accounts, among other offences

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

The Director  Disqualified failed to ensure that the Company complied with its statutory duties to file returns and make payments to HM Revenue and Customs (HMRC) when due and caused the Company to trade to the detriment of HMRC from at least 7 June 2015 in respect of VAT until cessation of trade in February 2020. As a result, VAT liabilities estimated in the sum of at least £7,304 remained overdue and outstanding as at cessation of trade. The true level of VAT which remained overdue and outstanding as at cessation of trade in unclear. In that:

VAT

•  The bust Company was registered for VAT from 4 December 2014.
•  The bust Company failed to file VAT returns in respect of periods 04/15 to 01/19 and 10/19 to 04/20.
•  Assessments were raised in respect each of these periods including additional Officer Assessment in the sum of £8,238 raised in June 2016 in respect of periods 04/15, 10/15 and 01/16.
•  The assessments raised in respect of VAT periods 04/15 to period 01/19 were paid in full
•  The only VAT returns filed at any time were in respect of VAT periods 04/19 (VAT due in the sum of £2,114) and 07/19 (VAT due in the sum of £7,304.57). These periods were paid in full.
•  The assessments raised in respect of periods 10/19 onwards remained outstanding on liquidation.
•  He has declared the sum of £45,000 was owed to HMRC on liquidation in the Company’s sworn Statement of Affairs.
•  The true amount of VAT which remained overdue and outstanding on liquidation in unclear.

Comparative treatment

•  HMRC is understood to be the majority creditor in the liquidation.
•  Trade creditors are understood to be owed £3,000 and the Bank £35,000 in respect of an outstanding Bounce back Loan.
•  The available bank statements record that From 1 October 2017 to liquidation on 30 April 2021, the Company’s current accounts received credits totalling £564,827.68 and expended £579,377.43 of which payments of £38,157.48 were made to HMRC from the account. HMRC’s records confirm that payments totalling £32,663.37 were allocated to the VAT account.

 The bust Company’s current accounts records that he received net payments from the bust Company, or payments for his benefit referenced The Insolvent Company understood to represent payments to his personal bank account, totalling £406,000 over the same period.

Case 24 – Director Disqualification for insufficient accounting, among other offences

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

The Director Disqualified failed to ensure that between 1 September 2016 and 13 July 2020 (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 for the Liquidator to account for, or recover £200,197

• He states was paid in cash in respect of an alleged unlisted investment in South Africa which was recorded as an asset in IC annual accounts.
• The Banned Director caused The Insolvent Company (‘IC’) to trade to the detriment of HM Revenue and Customs (HMRC) during the period from 1 June 2018, in that:
•  Corporation Tax totalling £63,691 for the periods ending 31 August 2017 and 31 August 2018, based on Returns, was due for payment by at least 1 June 2018
•  Between 1 June 2018 and 23 July 2020 (when the account was closed) £108,500 was paid into IC bank account; of which £409 was paid to HMRC, £47,891 to him and £60,809 to third parties or trade and expense creditors.

 HMRC have claimed £70,440 within the liquidation proceedings, being Corporation Tax of £63,691 plus penalty and interest. The only other creditor at the date of liquidation was £1,800 owing to a trade creditor.

Case 25 – Director Disqualification for transactions to the detriment of HMRC, among other offences

Director Disqualified for 10 years by Order of the Court.

The Disqualified 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 HM Revenue & Customs (‘HMRC’) from at least 12 October 2018, when it breached a time to pay agreement with HMRC for VAT outstanding from March 2018, to its cessation in May 2021. As a consequence HMRC has submitted a claim in the liquidation for £448,735. In that:

•  IC was incorporated and commenced trading on 06 December 2016.

VAT

•  The Insolvent Company was registered for VAT from 24 November 2017 and its first VAT return was filed to March 2018;
•  This return was due for payment by 07 May 2018l
•  On 25 September 2018 HMRC agreed time to pay the returns for March to July 2018, the first payment being due on 12 October 2018;
•  No payments were made towards the TTP or subsequently, although a repayment return credit for June 2019 was allocated in part-payment of March 2018;
•  HMRC claimed £191,853 for VAT outstanding from March 2018.

Corporation Tax

•  Corporation tax returns were filed for all periods to 31 December 2019;
•  Payment for IC first year was due on 06 September 2018;
•  No payments were made for CT and at the liquidation date HMRC claimed £61,501.

PAYE/NIC/CIS

•  PAYE/NIC and CIS returns were submitted to April 2021;
•  The amounts due each year to HMRC were off-set by CIS deductions suffered by The Insolvent Company .
•  From 2018/19 the deductions were insufficient to settle the amount due from The Insolvent Company
•  One payment was made towards PAYE/NIC/CIS, of £10,000 on 15 October 2020;
•  HMRC’s claim includes PAYE/NIC/CIS outstanding of £175,328.

Comparative treatment

•  Accounts to 31 December 2018 show £20,427 was owed to trade creditors and £39,185 was due to HMRC;
•  By the liquidation date trade creditors were owed £53,279 and HMRC claimed £448,735;
•  The earliest known trade creditor dates from November 2020, whereas HMRC’s debt accrued from May 2018 (the March 2018 VAT return);
•  Accounts from 01 January 2019 to 28 February 2021 disclose expenses paid of £1,909,802, of which £10,000 was paid to HMRC;

 Further income of £92,315 was received from 01 March 2021, but no further payments were made to HMRC.

Case 26 – Director Disqualification for not meeting obligations to HMRC, among other offences

Director Disqualified for 10 years by Order of the Court .

The Banned Director failed to ensure that The Insolvent Company, formerly known as The Insolvent Company complied with its statutory obligations to HM Revenue and Customs (hereinafter referred to as HMRC) to submit accurate and timely returns and make payments in full, from at least 07 May 2015 to 15 February 2019, the cessation of his directorship. In addition from at least 1 February 2017 The Insolvent Company traded to the detriment of HMRC, in that:

VAT

• The Insolvent Company registered for VAT on 01 April 2015 and was required to submit quarterly returns from 07 May 2015;
• The Insolvent Company submitted and paid returns until the period 01/16;
• From 07 May 2015 The Insolvent Company failed to submit returns on time for the periods 04/15 to 01/19 causing HMRC to estimate the liability owed at £13,918.00;
• The Insolvent Company subsequently submitted returns for the periods 04/15, 07/15, 10/15 on 31 March 2017 and for 01/16 on 18 May 2018 totalling £7,945.40, withdrawing the previous assessments raised for these periods making the amount owed to HMRC in respect of VAT £18,415.40;
• With the addition of surcharges of £253.30, the total amount owed was £18,668.70;
• During the same period payments of £12,614.12 were made leaving a balance of £6,054.58;
• A review of the bank statements estimates for the 8 periods 04/17 (the date bank statements are available for) to 01/19 show that the liability to HMRC in respect of VAT was £86,529.27.
• Review of the VAT ledger shows that for the 8 periods 04/15 to 01/17 the liability in respect of VAT was £10,293.40. Review of the bank statements shows that for the 8 periods 04/17 to 01/19 the liability in respect of VAT is estimated as £86,529.27. Charges for the 16 periods 04/15 to 01/19 were raised for £253.30. Payments of £12,614.12 were made in respect of the 16 periods 04/15 to 01/19. This leaves the total estimated outstanding amount in respect of VAT of at least £84,461.85.

Corporation Tax

• For the period ending 30 November 2014 The Insolvent Company filed a return for £10,613.20. Payments of £7,673.00 were made leaving £2,940.20 outstanding;
• For the periods ending 30 November 2015 and 30 November 2016 returns were submitted late causing HMRC to raise assessments. Returns were subsequently submitted totalling £85,876.28; Penalties for these periods of £10,724.71 were added. No payments were made towards this liability leaving £96,600.99 outstanding;
• No returns were submitted for the periods ending 30 November 2017 and 30 November 2018. Penalties for these periods of £1,500.00 were added up to 17 February 2019. No payments were made towards this liability leaving £1,500.00 outstanding.
• The total amount outstanding in respect of corporation tax is at least £101,041.19.

Comparative Treatment

• The Insolvent Company operated two bank accounts which show, between 1 February 2017 (the first date statements are available) and 31 January 2019, excluding inter-account transfers, a total of £944,117.04 was paid into the accounts and £941,555.39 was paid out of the accounts. Of which:
• £490,294.28 was paid in trade and expenses,
• £257,502.73 was paid to The Banned Director or for what appears to be connected parties,
• £162,846.76 were debits for an unknown purpose
• £28,821.12 was paid to HMRC
• £1,490.40 was paid in interest and charges

£600.10 was paid to a connected company.

Case 27 – Director Disqualification for not meeting statutory obligations, among other offences

Director Disqualified for 7 years by Court Order.

The Director Disqualified failed to ensure that The Insolvent Company complied with its statutory obligations to submit returns and make payments on time to Her Majesty’s Revenue and Customs (HMRC) with regards to VAT and Corporation Tax (CT), and from at least 2 October 2017 onwards caused The Insolvent Company to trade to the detriment of HMRC resulting in liabilities of at least £156,653, in that:

Value Added Tax (VAT)

•  The Insolvent Company registered for VAT on 01 April 2014.
•  No VAT returns were submitted by The Insolvent Company for the VAT periods 12/15 to 09/17 resulting in assessments being raised by HMRC totalling £4,144 and surcharges totalling £322.
•  A payment of £418 was made on 03 October 2016.
•  A VAT return was submitted for the period 12/17 resulting in a liability of £5,814 which was paid on 09 February 2018.
•  A payment of £8,114 was made on 09 May 2018.
•  No further VAT returns were submitted nor payments made.
•  Although only one VAT return was submitted by The Insolvent Company from period 12/15 onwards, actual VAT liabilities were calculated by The Insolvent Company’s accountant from information obtained from The Insolvent Company’s own records, up to 31 July 2019. The VAT liabilities accrued as follows:
• Year ended 31 July 2016 £13,171
• Year ended 31 July 2017 £33,558
• Year ended 31 July 2018 £61,810
• Year ended 31 July 2019 £95,044
•  The Insolvent Company’s liability to HMRC at liquidation in respect of VAT, based upon the accountant’s figures was £95,044.

Corporation Tax CT

•  Information obtained from HMRC details that CT returns were submitted for all periods from 01 March 2015 to 31 July 2018, resulting in liabilities totalling £58,038. This sum includes a charge of £14,823 raised by HMRC on 01 August 2019 as a result of his failing to repay his Director’s Loan the previous year.
•  Penalties totalling £2,000 were raised between 06 – 16 February 2018.
•  No return was submitted for the period 01 August 2018 – 31 July 2019 resulting in a penalty of £200 being raised by HMRC.
•  Interest of £3,371 was also charged.
•  Between 01 March 2018 and 29 October 2018, a total of £2,000 was paid towards outstanding liabilities and applied to periods 01 March 2015 – 28 February 2016 and 29 February 2016 – 31 July 2016, neither of which were paid in full. No further payments were made.
•  At the date of liquidation, The Insolvent Company’s liabilities to HMRC in respect of CT totalled £61,609.

Different treatment

•  Analysis of The Insolvent Company’s bank statements for the period 02 October 2017 to 09 September 2020 shows that payments of £1,053,819 were made from the account of which £15,928 was paid to HMRC, at least £53,906 was paid to him via bank transfer and the remaining £983,985 was paid to other parties.
•  Accounts for period ended 31 July 2016 show that HMRC was owed a total of £22,319, trade creditors were owed £32,015 and other creditors were owed £1,720.
•  By comparison, at liquidation trade creditors had increased by £26,077 to £58,092, liabilities to HMRC had increased by £134,334 to at least £156,653 and there were no liabilities to other creditors.
• “Between 08 January 2018 and 30 April 2021, the Banned Director), caused or allowed The Insolvent Company (IC) to trade to the detriment of HM Revenue & Customs (HMRC) by failing to ensure IC made payments as and when due in respect of VAT and Corporation Tax, in that:

VAT

•  IC VAT liability for the 11/17 VAT period (included in the balance) became due for payment on 08 January 2018 where there was an outstanding balance on IC VAT account of £38,573.
•  From quarter ended 11/17 IC submitted monthly VAT returns up to and including the 04/21 VAT period. Between 11/17 and 04/21 VAT periods, £285,104 of VAT was due for payment. In addition, further liabilities totalling £30,884 became due in the period in respect of an officer assessment, surcharges, penalties and interest, making a total liability due for the period of £315,988;
•  In the period (11/17 to 04/21), payments totalling £95,066 were made towards IC VAT liability. In addition, the sum of £52,771 was credited to the VAT account from IC CIS account in respect of CIS deductions suffered by IC in the 18/19 and 19/20 tax years;
•  As at 30 April 2021, the balance of IC VAT account had increased by £168,150 to £206,723, which remained outstanding as at the date IC entered liquidation.

Corporation Tax

•  As at 08 January 2018, IC had an outstanding Corporation Tax (CT) liability of £44,644, relating to the 2015/16 financial year;
•  IC CT liability for 2016/17 was £24,629 and was due for payment by 31 May 2018;
•  IC reported a loss for 2017/18 and 2019/20. TCEL’s liability for 2018/19 was £4,371 and due for payment by 31 May 2020;
•  IC made no payments towards its CT liabilities in the period, leaving IC unpaid CT liability at £73,644.
• Comparative Treatment
•  IC bank statements record that between 08 January 2018 and 30 April 2021, the sum of £1,855,889 was credited to the bank accounts used by IC by its sole client;
•  Of this sum, £424,633 was paid to, or for the benefit of, him and IC other director, compared to only £95,066 paid to HMRC;
•  On 26 October 2019, a winding-up petition was presented against IC by HMRC. Despite this, compared to the period between 08 January 2018 and 25 October 2019, the value of payments to, or for the benefit of, him and IC other director went up (£252,199 compared to £172,434), whilst the value of payments to HMRC went down (£17,722 compared to £77,344);

 In liquidation, HMRC was owed £282,166 out of total liabilities, and a deficiency, of £284,751.

Case 28 – Director Disqualification for not meeting liabilities to HMRC, among other offences

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

The Director Disqualified failed to ensure that The Insolvent Company complied with its statutory obligations to file returns and pay the liabilities disclosed to HM Revenue and Customs (HMRC) in respect of Value Added Tax (VAT) from 07 February 2015 until the date of Liquidation on 03 March 2020 and he caused IC to trade to the detriment of HMRC from at latest 30 September 2015 in respect of VAT, from at latest 22 May 2017 in respect of Pay As You Earn (PAYE/NIC) and from at latest 01 July 2018 in respect of Corporation Tax (CT) resulting in estimated liabilities due to HMRC at Liquidation totalling at least £452,190.46 (including accrued interest of £3,249.52 up to the date of Liquidation). In that:

• HMRC raised assessments for the quarters for June 2014 onwards as no VAT returns were filed resulting in a VAT liability of £292,712.51.
• The last payment made by the Company against the outstanding VAT debt was £2,924.96 received on 24 March 2015 which was set-off against the debt for the June 2014 quarter.
• A PAYE/NIC liability (including penalties, charges and interest) of £122,651.78 is outstanding for tax years 2015/2016, 2016/2017, 2017/2018, 2018/2019 and 2019/2020.
• The last payment made by the Company against the outstanding PAYE/NIC debt was £7,159.60 received on 20 August 2018 which was set-off against the debt for the 2018/2019 tax year.
• A Corporation Tax liability of £33,576.65, including a penalty, was incurred for the periods ending 30 September 2017 and 2018.
• Financial statements for the year ending 30 September 2015 had total liabilities of £296,790 of which £81,054 is due to HMRC and £215,736 to other creditors; included within current assets is The Director’s directors’ loan account (DLA) showing £102,173 due to the Company.
• Financial statements for the year ending 30 September 2016 had total liabilities of £370,270 of which £160,030 is due to HMRC and £210,240 to other creditors; included within current assets is The Director’s DLA showing £40,236 due to the Company.
• Financial statements for the year ending 30 September 2017 had total liabilities of £569,782 of which £260,177 is due to HMRC and £309,605 to other creditors; included within current assets is The Director’s DLA showing £274,043 due to the Company.
• Analysis of the bank statements for the Company current account in the period from 01 October 2017 to 17 February 2020 show £1,475,141.51 being paid out of the account and £1,396,991.87 being paid into the account. The bank statements show £93,763.54 being paid to HMRC in that period, the last payment being on 20 August 2018.

£452,190 is owed to HMRC and The Banned Director’s DLA had increased to £274,912, of which he has repaid £3,304 in the liquidation proceedings.

Case 29 – Director Disqualification for fraudulent trading, among other offences

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

Between 17 December 2014 and 11 November 2016, the date of liquidation, The Banned Director whilst named as a formally appointed director caused or allowed The Liquidated Company to accept customer payments of at least £197,574 without providing any genuine services in that;

• The Liquidated Company promoted itself to potential customers as providing specialist insolvency services and business recovery professionals that could facilitate the aversion of insolvent events
• The Liquidated Company accepted customer payments amounting to at least £202,674 from companies facing an imminent or likely insolvent event into its company bank account.
• The Liquidated Company facilitated the sale of Customer Company shares after the commencement of winding up these being void transactions and having no positive outcome in respect of the Customer Company’s unsecured creditors.
• Despite receiving such payments The Liquidated Company made no attempt to recover or turnaround the customers’ company businesses for at least 31 out of 36 known customers. The total estimated deficiency of customer companies that resulted in compulsory liquidation per the Reports to Creditors (RTC) issued by the Official Receiver is £31,284,343.
• Between 17 December 2014 and 11 November 2016, the date of liquidation, The Disqualified Director whilst named as a formally appointed director caused or allowed The Liquidated Company to trade with a lack of commercial probity by operating a business model that has worked to undermine the insolvency regime, through:
• a) The transfer of companies to shareholders and directors who were, on the making of the winding up orders, consistently non-contactable by the Official Receiver and subsequently appointed Liquidators
• b) The consistent disappearance of customer company records that had been delivered to The Liquidated Company to be passed to the new directors and/or shareholders.
• c) The Liquidated Company wrongly informed former customer directors’ that their own directors’ compliance obligations would cease following the transfer of the companies to the new shareholders and directors.
• Despite being made aware of the winding up order made against The Liquidated Company Ltd on 11 November 2016 The Director whilst named as a formally appointed director caused or allowed The Liquidated Company  bankers to pay a former director  £26,000 from The Liquidated Company bank account on 2 December 2016 without authorisation from the Official Receiver as Liquidator of the Company.
• The named signatories on The Liquidated Company’s bank account were not formally appointed directors of The Liquidated Company at the time. The Disqualified Director, the formally appointed director was not a signatory on the bank account.
• The winding up order against The Liquidated Company was made on 11 November 2016. The Liquidated Company was present and represented by Counsel at the winding up hearing. The effects of the winding up order were:
• The Official Receiver was appointed as Liquidator.
• The powers of the directors ceased and their appointments automatically terminated.
• The Director Disqualified was issued with notices of the winding up order on 18 November 2016 these being acknowledged by th director by email confirmation from him on 24 November 2016. The Official Receiver’s notice states that The Banned Director should take no action in relation to the assets of The Liquidated Company without the authorisation of the Official Receiver.
• The director received £26,000 into his personal account from The Liquidated Company’s bank account on 2 December 2016 after providing the Bank with a statement of The Director titled VALIDATION dated 6 November 2016 claiming to validate the withdrawal of funds from The Liquidated Company bank account. No validation order from the Court had been sought or obtained by The Liquidated Company prior to liquidation, nor was the Court at the winding up hearing informed of the statement claiming to validate the withdrawal of funds
• The banned director failed to disclose that The Liquidated Company bank account had had funds amounting to £26,034 whilst in discussion with the Official Receiver’s staff following the making of the winding up order on 18 November 2016, or at interview with the Official Receiver on 13 December 2016.
• At a subsequent interview on 9 January 2017 the disqualified director claimed that the funds The Liquidated Company bank account belonged to him. As a result of the director failing to provide evidence the Official Receiver wrote to the director on 30 January 2017 requiring him to repay £26,000 and has applied to the Court to enforce this.
• The payment to the director had the following consequences:
• It put him in a better position, and;
• It was not in the interests of the unsecured creditors and did not occur in the ordinary course of business as a winding up order had been made.
• On 19 July 2017 The Director stated to the Official Receiver all transactions that were made by VP were with my advance discretion. Specifically instructed to transfer the amount of £26,000 to his personal bank account

The transaction was not made in good faith as The Liquidated Company had the opportunity to raise this issue at the winding up hearing on 11 November 2016 but did not, the ex director and The Director having been required not to take any action as regards The Liquidated Company assets.

Case 30 – Director Disqualification for trading to the detriment of HMRC, among other offences

Director Disqualified for 9 years by Order at trial.

The Director Disqualified failed to ensure that The Insolvent Company Limited (The Insolvent Company) submitted VAT returns when due to HM Revenue & Customs (HMRC) and caused The Insolvent Company to trade to the detriment of HMRC from 7 May 2019 to 04 May 2021 resulting in an estimated VAT liability in the sum of at least £55,017, in that:

•  The Insolvent Company incorporated on 10 May 2018 and on 20 September 2018 completed VAT registration paperwork for HMRC stating an estimated turnover of £100,000.
•  Only one VAT return was made, for period 12/18 on 10 April 2019 for £572, which was paid. No further VAT returns were made to HMRC.
•  Assessments were made for periods 03/19 to 9/19 totalling £2,154 which were paid.
•  Assessments were made for periods 12/19 to 03/21 totalling £6,653 for which no payments were made.
•  Therefore, overall, returns and assessments for The Insolvent Company from 10.05.2018 to 04.05.2021 totalled £9,379 of which £2,726 was paid.
•  An analysis of The Insolvent Company’s Accounts at Companies House and Bank records shows that its turnover in YE 31 May 2019 was £264,164, its turnover in YE 31 May 2020 was £362,168 and YE 04 May 2021 (Liquidation) was £67,611. A total turnover of £693,943. Therefore, on this basis, Output VAT, at 20%, due from The Insolvent Company was £115,657.
•  The statement of affairs for The Insolvent Company lists HMRC as a creditor for VAT in the sum of £55,017.

 Analysis of creditors for the company shows the amount owing to HMRC has increased year on year from £43,455.73 for YE 31.05.19 to £59,146 at liquidation. In the same period the amount owing to other creditors was £3,456 in prepared accounts for YE 31.05.19 rising to £9,942 at liquidation.

Case 30 – Director Disqualification for trading to the detriment of HMRC, among other offences

Director Disqualified for 9 years by Order at trial.

The Director Disqualified failed to ensure that The Insolvent Company Limited (The Insolvent Company) submitted VAT returns when due to HM Revenue & Customs (HMRC) and caused The Insolvent Company to trade to the detriment of HMRC from 7 May 2019 to 04 May 2021 resulting in an estimated VAT liability in the sum of at least £55,017, in that:

•  The Insolvent Company incorporated on 10 May 2018 and on 20 September 2018 completed VAT registration paperwork for HMRC stating an estimated turnover of £100,000.
•  Only one VAT return was made, for period 12/18 on 10 April 2019 for £572, which was paid. No further VAT returns were made to HMRC.
•  Assessments were made for periods 03/19 to 9/19 totalling £2,154 which were paid.
•  Assessments were made for periods 12/19 to 03/21 totalling £6,653 for which no payments were made.
•  Therefore, overall, returns and assessments for The Insolvent Company from 10.05.2018 to 04.05.2021 totalled £9,379 of which £2,726 was paid.
•  An analysis of The Insolvent Company’s Accounts at Companies House and Bank records shows that its turnover in YE 31 May 2019 was £264,164, its turnover in YE 31 May 2020 was £362,168 and YE 04 May 2021 (Liquidation) was £67,611. A total turnover of £693,943. Therefore, on this basis, Output VAT, at 20%, due from The Insolvent Company was £115,657.
•  The statement of affairs for The Insolvent Company lists HMRC as a creditor for VAT in the sum of £55,017.

 Analysis of creditors for the company shows the amount owing to HMRC has increased year on year from £43,455.73 for YE 31.05.19 to £59,146 at liquidation. In the same period the amount owing to other creditors was £3,456 in prepared accounts for YE 31.05.19 rising to £9,942 at liquidation.

Case 31 – Director Disqualification for abuse of the Bounce Back Loan Scheme, among other offences

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

That during May 2020 The Director Disqualified applied for a Government backed Bounce Back Loan (BBL) of £50,000 in the name of The Liquidated Company (The Company) when he knew, our ought to have known, that the company turnover did not support such an application and that information supplied to support the application was false.

• The BBL criteria allowed a company to borrow between £2,000 and a maximum of £50,000 based on 25% of the company’s turnover for 2019. The funds could only be used to provide economic benefit to the company and not for personal purposes.
• The Banned Director stated on the application that the turnover of the company was £267,500 and that the company would like to borrow £50,000 under the BBL scheme.
• Analysis of the one known company bank account shows that the account was opened, and that the first account transactions inclusive of receipt of the BBL monies were credited, 5th May 2020.
• Unaudited abridged accounts signed by The Director for the period 9th April 2019 to 30 April 2020, filed at Companies House 5th July 2021, show shareholder funds of (£30,627).
• Despite requests by the Insolvency Service The Director has failed to evidence or satisfactorily explain the company trading position and turnover prior to 5th May 2020.
• The Banned Director has failed to evidence or satisfactorily explain how the £50,000.00 BBL monies were used.
• That during August 2020 The Director made three separate claims through the Eat Out To Help Out scheme (EOTHO) totalling £91,029.46 in the name of The Company when there is no evidence to support that the company owned, or operated, a qualifying establishment, or if it did, that the level of the claims were accurate.
• The EOTHO scheme was open to businesses who registered their establishment for the scheme and offered discounts of 50% on food and non-alcoholic drinks to diners on Mondays to Wednesdays between 3 and 31 August 2020. The businesses could claim back the discount given on food and non-alcoholic drinks up to a maximum of £10 per diner.
• Three separate claims were submitted to HMRC by The Disqualified Director on behalf of the Company, using the EOTHO scheme registration number of EOR186081 as follows:
• Claim EOC411273 for period 17th to 19th August totalling £37,888.24 for 4083 diners.
• Claim EOC464991 for period 24th to 26th August totalling £38,920.79 for 4115 diners.
• Claim EOC489132 for period 31st August only totalling £14,220.43 for 1481 diners.
• The Director has confirmed that the EOTHO claim related to the Al-Madina, 76 Wilmslow Road, Rusholme, Manchester, M14 5AL. Internet searches show that this establishment is a small takeaway type restaurant with seating for approximately 10 diners, notwithstanding COVID 19 distancing restrictions.
• The claim amounts equate to an average of 1383 diners served per day over the course of the qualifying period claimed, with a minimum total spend (as per the scheme guidelines) of £182,058.92. If the restaurant operated for 12 hours per day this would equate to 115 diners served per hour.
• Analysis of the one known company bank account shows no transactions identifiable with the running of a restaurant type establishment or with the level of turnover the EOTHO claim suggests e.g., rental or lease payments, business rates, staffing expenses, food and consumables purchases or diner receipts. The Banned Director has failed to evidence or satisfactorily explain this position.
• The Disqualified Director failed to ensure that the Company maintained and/or preserved adequate accounting records, or alternatively, The Banned Director has failed to deliver up to the Liquidator of the Company, for a period from at least 9th April 2019, the date incorporation, to 1st September 2021, the date of CVL, such records as were maintained, with the consequence that it has not been possible to determine:
• Whether receipts into the company bank account of £412,116.93. represent the total income of the company.

Whether payments out of the company bank accounts, inclusive of £50,000 relating to the BBL, totalling £412,513.87 were legitimate company expenditure.

Case 32 – Director Disqualification for failing to make payments to HMRC, among other offences

Director Disqualified for 12 years by a director signed undertaking.

The Director Disqualified caused The Insolvent Company (The Insolvent Company) to trade to the detriment of HM Revenue & Customs (HMRC) by failing to make payments as and when they fell due in respect of PAYE and NIC of £40,556 from 22 December 2018 and in respect of VAT of £59,510 from 07 April 2019 to cessation of trade, on or around 16 November 2021, in that;

PAYE

• According to HMRC’s Ledgers, The Insolvent Company deducted £54,395 in PAYE and NIC between 13 November 2018 and the cessation of trade. Deductions became due for payment from 22 December 2018 onwards. The ledgers detail no payments to HMRC in respect of these deductions.
• Employment Allowances of £13,839 were credited to The Insolvent Company PAYE account leaving an outstanding liability of £40,556.
• BD was provided with PAYE calculations by The Insolvent Company accountant detailing the liabilities owed by The Insolvent Company.
• HMRC’s claim for outstanding PAYE/NIC in the liquidation covers the tax years 2018/2019, 2019/2020, 2020/2021 and 2021/2022 and details a total PAYE/NIC liability of £40,556.

VAT

• The Insolvent Company was registered for VAT with HMRC on 13 November 2018. The Insolvent Company was required to account for its VAT from that point. As sole director, Mrs. BD was responsible for ensuring that The Insolvent Company tax affairs were in order.
• According to HMRC Ledgers, The Insolvent Company submitted VAT returns to HMRC for the quarters ended 28 February 2019 to 30 November 2019. These returns fell due for payment from 07 April 2019 onwards and show an amount due to HMRC of £38,385. The ledgers detail no payments in respect of these liabilities.
• HMRC Ledgers also detail assessments raised by HMRC for the quarters ended 29 February 2020 to 31 August 2021 of £21,125. The ledgers detail no payments in respect of these assessments.
• BD was made aware of the increasing VAT liabilities by The Insolvent Company accountant.
• HMRC’s claim for outstanding VAT in the Liquidation covers the period from 13 November 2018 to 03 August 2022 and details a total VAT liability of £62,647 including surcharges amounting to £3,137.

Comparative Treatment

• Between 31 December 2018 and 25 November 2021, bank statements show that income into The Insolvent Company bank account totalled £1,094,460. Payments out of that bank account in the same period totalled £1,097,992 including £531,060 to trade creditors, £467,633 to employees, £53,637 as company expenses and £44,094 as cash withdrawals. Bank statements do not show any payments being made to HMRC towards the company’s PAYE and VAT liability.
• At liquidation, The Insolvent Company had liabilities outstanding of £61,937 to trade creditors, £37,199 to the bank, £18,000 to Mrs. Sibthorp and at least £103,203 to HMRC in respect of PAYE (40,556) and VAT (£62,647).”
• “From 5 December 2017 to 5 June 2021 The Disqualified Director allowed The Insolvent Company to fail to comply with its statutory obligations to submit timely and accurate Construction Industry Scheme (CIS) returns to Her Majesty’s Revenue and Customs (HMRC) and allowed T&T to trade to the detriment of HMRC from at least 01 August 2019 to Liquidation, resulting in CIS losses at liquidation to HMRC totalling £289,054.
•  Companies are required to Send monthly returns to HMRC by the 19th of every month following the last tax month on account of CIS deductions.
•  Year ending July 2018 financial accounts show The Insolvent Companys CIS liability outstanding at £10,799. During this year there was a period of 8 months where no CIS returns were submitted by IC (the remaining 4 returns were nil returns).
• The Insolvent Company incurred CIS liabilities of £62,196 during the year ending July 2019. During this year The Insolvent Company failed to submit CIS returns for 8 months. The Insolvent Company submitted 4 monthly CIS returns during this period disclosing liabilities of £10,202 meaning that during this year The Insolvent Company failed to declare £51,994 of CIS liabilities.
•  The Insolvent Company incurred CIS liabilities of £68,989 during the year ending July 2020. During this year 12 CIS returns were submitted by The Insolvent Company disclosing CIS liabilities of £49,538. The returns submitted during this period were not accurate as £19,451 of CIS liabilities were not declared.
•  Between August 2020 to Liquidation, CIS returns were submitted by IC disclosing CIS liabilities of £56,289. These returns were submitted one day before the liquidation.
•  The Insolvent Company’s failure to submit accurate and timely CIS returns meant that HMRC were not aware of The Insolvent Company’s true CIS liabilities and as a result could not take steps to enforce collection.
•  HMRC launched a compliance check and issued correspondence to The Insolvent Company on 11 March 2021 and 17 May 2021 requesting CIS information no response was received.
•  As a result of the failure to respond HMRC issued determinations under S61 of the Finance Act 2004 on 22 September 2021 for tax due, for period 6 April 2017 to 21 July 2021 totalling £180,153.
•  At 31 July 2019 The Insolvent Company owed £185,385 to trade creditors, £72,995 to HMRC in respect of CIS, £41,084 to HMRC in respect of other taxes, and a co-director owed T & T £89,531 in respect of his loan account. By the date of liquidation, the amount owed to trade creditors had decreased to £77,303 and other taxes had decreased to £40,477 while the amount owed in CIS had increased to £289,054 and the balance of the directors’ loan account had increased to £151,802. IC also owed £51,000 in respect of a Bounce Back Loan.

 Bank account statements shows that from 17 October 2019 to cease of trade, receipts into the account total £2,010,295 payments out total £2,010,956 of which £1,879,255 was paid to trade creditors and expenses, £55,951 to HMRC (£20,300 of which on account of CIS) and £14,332 to her and £61,418 to the co-director.

Case 33 – Director Disqualification for not meeting statutory obligations, among other offences

Director Disqualified for 2 years by an undertaking agreed by the director.

The Director Disqualified failed to ensure that The Insolvent Company (The Insolvent Company), complied with its statutory obligations to submit returns and payments to HM Revenue & Customs (HMRC) as and when due and caused The Insolvent Company to trade to the detriment of HMRC in respect of Pay As You Earn/National Insurance Contributions (PAYE/NIC) from 22 October 2019 to 13 October 2020 and Value Added Tax (VAT) from 07 February 2020 to 13 October 2020 the date of the liquidation of The Insolvent Company. In that.

PAYE/NIC

•   sales submitted Real Time Information (RTI) returns for the period ended 05 October 2019 to 05 August 2020 disclosing a PAYE/NIC liability of £484,918.
•  There were no payments made in respect of PAYE/NIC over the period 22 October 2019 to 13 October 2020 leaving £484,918 outstanding at liquidation.

VAT

•  sales failed to submit returns in respect of the three VAT quarters ended 31 December 2019, due 07 February 2020, to 30 June 2020, due 07 August 2020. As a consequence, HMRC raised estimated assessments in the total sum of £28,951.
•  There were no payments made in respect of VAT over the period 07 February 2020 to 13 October 2019 leaving the sum of £28,951, outstanding at liquidation.

The Insolvent Company Comparative Treatment

•  Analysis of a company’s bank account between 29 January 2020 and 22 October 2020 shows receipts of £1,279,111 and payments out in the total sum of £1,279,045. Of the £1,279,045 paid out of the account £3,397 was paid against trade and expense liabilities, £1,235,981 in respect of wages, £1,007 in payments which cannot be classified from the bank statements, £38,588 to a connected company, and £72 applied to bank charges. During this time The Insolvent Company made no payments to HMRC in respect of VAT and PAYE/NIC.
•  Claims submitted at liquidation totalled £515,694 of which HMRC have claimed £513,869.
• The Banned Director (BD) failed to ensure that the Liquidated Company (LC), trading as AGO Outsourcing, complied with its statutory obligations to submit returns and payments to HM Revenue & Customs (HMRC) as and when due and caused LC to trade to the detriment of HMRC in respect of Value Added Tax (VAT) from 07 October 2018 to 31 October 2019 and PAYE/NIC from 22 March 2018 to 31 October 2019, the date of the liquidation of LC. In that:

PAYE/NIC

•  LC submitted Real Time Information (RTI) returns for the period ended 05 March 2018 to 05 October 2019 disclosing a PAYE/NIC liability of £425,032 against which Employment allowance of £8,632 applied. Leaving a PAYE/NIC liability of £416,400
•  Over the period 2 payments to the total of £33,948 were made toward this PAYE/NIC debt leaving £382,452 outstanding at liquidation.

VAT

•  LC submitted returns for the three VAT quarters ended 31 August 2018 due 07 October 2018 to 28 February 2019 due 07 April 2019 disclosing a VAT liability of £175,491.
•  LC failed to submit returns in respect of the two VAT quarters ended 31 May 2019, due 07 July 2019, to 31 August 2019, due 07 October 2019. As a consequence, HMRC raised estimated assessments in the total sum of £66,945 and levied £4,977 in surcharges.
•  There were no payments made in respect of VAT over the period 07 October 2018 to 31 October 2019 leaving the sum of £247,413, inclusive of surcharges, outstanding at liquidation.

LC Comparative Treatment

•  Analysis of the company’s bank account between 22 March 2018 and 07 October 2019 shows receipts of £4,610,291 and payments out in the total sum of £4,610,396. Of the £4,610,396 paid out of the account £1,180,369 was paid against trade and expense liabilities, £3,211,890 in respect of wages, £153,532 in payments which cannot be classified from the bank statements, £23,420 to connected companies, £3,075 in cash withdrawals and £4,162 applied to bank charges. During this time Lakemere made two payments totalling £33,948 to HMRC in respect of PAYE/NIC.

 Claims submitted at liquidation totalled £794,969 of which HMRC have claimed £629,865.

Case 34 – Director Disqualification for misrepresentation on a Bounce Back Loan application, among other offences

Director Disqualified for 10 years by a director signed undertaking.

The Director Disqualified provided inaccurate information to The Insolvent Company’ bankers about the company’s turnover when applying for the Government Bounce Back Loan (BBL) scheme. He further failed to use the loan monies obtained under the scheme for the economic benefit of The Insolvent Company as required by the scheme and used these for the benefit of himself. In that:

• 1.1 The BBL criteria allowed a company to borrow between £2,000 and a maximum of £50,000 based on 25% of the company’s turnover. The funds could only be used to provide economic benefit to the company and not for personal purposes.
• 1.2 On 7 May 2020, he on behalf The Insolvent Company applied for and obtained a £50,000 BBL from The Insolvent Company’s banker. He informed the bankers that The Insolvent Company had an estimated annual turnover of £245,000. The Insolvent Company’s available records show that it received £77,911 between January 2019 and December 2019. The maximum amount of BBL that The Insolvent Company could receive was £19,478.
• 1.3 The £50,000 was received by The Insolvent Company on 11 May 2020. The Insolvent Company’s banking transactions between 12 May 2020 and 29 June 2020 show a total of £2,791 was withdrawn through cash machines and £39,500 was transferred to him respectively. There is no evidence available or provided by him to show that the funds were used towards trading expenditure.
• 1.4 On 30 July 2021, he instructed the Insolvency Practitioner to place The Insolvent Company into liquidation. The resolution to place The Insolvent Company into creditors’ voluntary liquidation was passed on 18 August 2021.
• 1.5 His signed Statement of Affairs shows that as at 9 August 2021, The Insolvent Company had an estimated deficiency to creditors of £81,730, including the sum of £50,000 owing to the bankers in respect of the BBL.
• From 1 November 2018, the day after the last accounts were filed at Companies House, to 21 August 2021, the date of liquidation, he failed to ensure that The Insolvent Company maintained and or preserved The Insolvent Company’s accounting records or in the alternative he failed to deliver up the records to the Liquidator. As a result, it has not been possible to ascertain or verify:
• 2.1 The level of The Insolvent Company’s turnover during the period. The Insolvent Company’s bank account received a total of £278,607, including a Bounce Back Loan (BBL) of £50,000. No sales records have been delivered up to the Liquidator. No draft or management accounts for 31 October 2019 or for the final period were prepared and if so prepared these were not delivered up to the Liquidator. It is not possible to determine the whole of The Insolvent Company’s receipts and verify what those receipts related to and the debtor position.
• 2.2 The reasons for payments totalling £278,608 made from the bank account during the period and whether these payments were used for genuine company expenditure. No purchase ledger and purchase invoices were delivered up to the Liquidator. No evidence has been supplied that these funds were used for genuine company expenditure.
• 2.3 Whether the level of The Insolvent Company’s turnover was sufficient to support an application for a BBL to the value of £50,000. No evidence to support the basis of his statement of The Insolvent Company’s annual turnover of £245,000 has been provided.
• 2.4 Whether the BBL funds received by The Insolvent Company of £50,000 were used for the economic benefit of The Insolvent Company and not for personal purposes in accordance with the terms of the BBL scheme. No evidence of the use of these funds has been provided.
• 2.5 Determine the exact amount paid to him by way of remuneration and other benefits and whether such sums were subjected to proper taxation. During the period, £61,410 was transferred to him.
• 2.6 Determine the accuracy of his claim in the Liquidation of £21,580. No particulars of how or when the debt was incurred, or any documents have been provided to substantiate his claim.
• He provided inaccurate information to LC bankers about LC turnover when applying for the Government Bounce Back Loan (BBL) scheme. He further failed to use the BBL monies obtained under the scheme for the economic benefit of LC as required by the scheme and used these for the benefit of himself:
• 3.1 The BBL criteria allowed a company to borrow between £2,000 and a maximum of £50,000 based on 25% of the company’s turnover. The funds could only be used to provide economic benefit to the company and not for personal purposes.
• 3.2 On 4 May 2020, he on behalf of LC applied for and obtained a £50,000 BBL from the liquidated company banker. He informed the bankers that the liquidated company had an estimated annual turnover of £240,000. the liquidated company available records show that it received £120,799 between January 2019 and December 2019. The maximum amount of loan that the liquidated company could receive was £30,200.
• 3.3 The £50,000 was received by the liquidated company on 7 May 2020. the liquidated company banking transactions show that on 3 July 2020 £42,000 was transferred to him. There is no evidence available or provided by him to show that the funds were used towards trading expenditure.
• 3.4 On 28 July 2021, he contacted the Insolvency Practitioner about the liquidated company financial position. The resolution to place the liquidated company into creditors’ voluntary liquidation was passed on 18 August 2021.
• 3.5 He signed Statement of Affairs shows that as at 11 August 2021, the liquidated company had an estimated deficiency to creditors of £78,930, including the sum of £50,000 owing to the bankers in respect of the BBL.
• From 13 July 2018, the date of incorporation, to 18 August 2021, the date of liquidation, he failed to ensure that the liquidated company maintained and or preserved accounting records or in the alternative he failed to deliver up the records to the Liquidator. As a result, it has not been possible to ascertain or verify:
• 4.1 The level of the liquidated company turnover during the period. the liquidated company bank account received a total of £380,652, including a Bounce Back loan (BBL) of £50,000. No sales records have been delivered up to the Liquidator. No draft or management accounts were prepared and if so prepared these were not delivered up to the Liquidator. It is not possible to determine the whole of the liquidated company receipts and verify what those receipts related to and the debtor position.
• 4.2 The reasons for payments totalling £380,803 made from the bank account during the period and whether these payments were used for genuine company expenditure. No purchase ledger and purchase invoices were delivered up to the Liquidator. No evidence has been supplied that these funds were used for genuine company expenditure.
• 4.3 Whether the level of the liquidated company turnover was sufficient to support an application for a BBL to the value of £50,000. No evidence to support the basis of his estimation of the company’s annual turnover of £240,000 has been provided.
• 4.4 Whether the BBL funds received by the liquidated company of £50,000 were used for the economic benefit of the liquidated company and not for personal purposes in accordance with the terms of the BBL scheme. No evidence of the use of these funds has been provided.
• 4.5 Determine the exact amount paid to him by way of remuneration and other benefits and whether such sums were subjected to proper taxation. During the period, £79,871 was transferred to him.
• 4.6 Determine the accuracy of his claim in the Liquidation of £20,650. No particular of how or when the debt was incurred, or any documents provided to substantiate his claim.
• He provided inaccurate information to the liquidated company bankers about the liquidated company turnover when applying for the Government Bounce Back Loan (BBL) scheme. He further failed to use the loan monies obtained under the scheme for the economic benefit of the liquidated company as required by the scheme and used these for the benefit of himself:
• 5.1 The BBL criteria allowed a company to borrow between £2,000 and a maximum of £50,000 based on 25% of the company’s turnover. The funds could only be used to provide economic benefit to the company and not for personal purposes.
• 5.2 the bust company was incorporated on 16 October 2019. On 8 May 2020, he on behalf of the bust company applied for and obtained a £50,000 Bounce Back Loan from its banker. He informed the bankers that the bust company had an estimated annual turnover of £230,000. There is no evidence of the bust company receiving any trading income during its trading period.
• 5.3 The £50,000 was received by LC on 11 May 2020. the bust company’s banking transactions show that in June 2020, 3 transfers totally £45,000 were made to him. There is no evidence available or provided by him to show that the funds were used towards trading expenditure.
• 5.4 On 28 July 2021, he contacted the Insolvency Practitioner about the bust company’s  financial position. The resolution to place the bust company into creditors’ voluntary liquidation was passed on 18 August 2021.
• 5.5 His signed Statement of Affairs shows that as at 13 August 2021, the bust company had an estimated deficiency to creditors of £72,950, including the sum of £50,000 owing to the bankers in respect of the BBL.
• From 16 October 2019, the date of incorporation, to 18 August 2021, the date of liquidation he failed to ensure that the bust company maintained and or preserved the company accounting records or in the alternative he failed to deliver up the records to the Liquidator. As a result, it has not been possible to ascertain or verify:
• 6.1 Whether the level of the insolvent company turnover was sufficient to support an application for a Bounce Back Loan (BBL) to the value of £50,000. No evidence to support the basis of his estimation of the insolvent company annual turnover of £230,000 has been provided.
• 6.2 Whether the BBL funds received by the insolvent company of £50,000 were used for the economic benefit of the insolvent company and not for personal purposes in accordance with the terms of the BBL scheme. No evidence of the use of these funds has been provided.
• 6.3 Determine the exact amount paid to him by way of remuneration and other benefits and whether such sums were subjected to proper taxation. During the period, £45,000 was transferred to him.
• 6.4 The level of the insolvent company turnover during the period. Between 5 February 2020 (first transaction) and 4 November 2021 (last transaction), the insolvent company bank account received a total of £69,885, including a BBL of £50,000 and £19,431 from connected companies. No sales records have been delivered up to the Liquidator. It is not possible to determine if the company was trading.
• 6.5 The reasons for payments totalling £69,929 made from the bank account during the period and whether these payments were used for genuine company expenditure. No purchase ledger and purchase invoices were delivered up to the Liquidator. No evidence has been supplied that these funds were used for genuine company expenditure.

6.6 Determine the accuracy of his claim in the Liquidation of £22,950. No particular of how or when the debt was incurred, or any documents provided to substantiate his claim.

Case 35 – Director Disqualification for failing to register for VAT, among other offences

Director Disqualified for 10 years by an undertaking agreed by the director.

The Director Disqualified failed to ensure that The Liquidated Company complied with its statutory obligations to HM Revenue & Customs (HMRC) by failing to register The Liquidated Company for VAT from January 2019 and remit any VAT due to HMRC when it ought to have, and failed to make accurate disclosure to HMRC resulting in an under-declaration of The Liquidated Company’s liabilities to HMRC for VAT of at least £46,565 and Corporation Tax of at least £140,540, in that:

• The Liquidated Company was incorporated on 12 September 2017 with The Banned Director the only recorded director. The Liquidated Company subsequently commenced trading on 28 July 2018;
• Following an investigation by HMRC, The Liquidated Company’s former agent disclosed sales figures to HMRC on 10 August 2021 showing The Liquidated Company exceeded the VAT threshold of £85,000 in January 2019 and therefore should have registered for VAT with effect from 01 March 2019.
• Application to register The Liquidated Company for VAT was subsequently received by HMRC on 03 September 2021;
• HMRC obtained evidence from a third party of further undisclosed income received by The Liquidated Company between August 2018 and June 2021 and that the sales disclosed by The Liquidated Company on 10 August 2021 had been suppressed.
• HMRC concluded that The Liquidated Company suppressed income for both VAT and Corporation Tax purposes and raised assessments for £46,565 in respect of VAT and £140,540 in respect of Corporation Tax for the accounting periods ending 30 September 2018, 2019 & 2020.

The Liquidated Company entered liquidation on 19 October 2021 with liabilities of at least £253,409, of which at least £252,138 is due to HMRC, including Corporation Tax for accounting period ending 30 September 2021 which was not due to be paid before liquidation and interest.

Case 36 – Director Disqualification for not meeting obligations to HMRC, among other offences

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

The Director Disqualified breached his duties as a director of The Insolvent Company by failing to ensure it complied with legislative requirements in that:

• the insolvent company did not comply with its statutory obligations under The Immigration, Asylum and Nationality Act 2006 resulting in the employment of three illegal workers who did not have the right to work.
• Following a visit from Home Office Immigration Officers on 25 January 2020 during which this breach was discovered, the insolvent company was issued with a penalty notice for £30,000. This penalty remained outstanding at the time The Disqualified Director applied for the voluntary dissolution of the insolvent company on 15 July 2021.
• On or around 15 July 2021 The Director applied to have the insolvent company dissolved when he knew or should have known that the company had outstanding debts and failed to give notice of the dissolution to the relevant parties as required by Section 1006 of the Companies Act 2006.
• On or around 15 July 2021 The Banned Director submitted an application to Companies House to dissolve the insolvent company .
• Section 1006 of the Companies Act 2006 requires the company to notify all interested parties of their intention to be dissolved.
• The Banned Director failed to notify the Home Office of his intention to dissolve the insolvent company, which denied them the opportunity to object to this action.
• At the time of the dissolution application, the Home Office was owed £30,000 in respect of a penalty.

The insolvent company was dissolved on 15 February 2022 and £30,000 remains outstanding to the Home Office.”

Case 37 – Director Disqualification for incorrect application for a BBL, among other offences

Director Disqualified for 10 years by an undertaking agreed by the director.

On 28 September 2020 The Liquidated Company obtained a Government backed Bounce Back Loan (BBL) totalling £50,000 and the Banned Director as the sole de jure director, failed to ensure that The Liquidated Company correctly applied for and thereafter used the BBL moneys in their entirety for the economic benefit of the business, contrary to the terms of the BBL. In that:

• The BBL scheme criteria allowed a business to borrow between £2,000 and up to 25% of the company turnover (with a maximum loan of £50,000), for the purpose of a business carried on or intended to be carried on by the applicant. A company was eligible to apply if it was established and operating before 01 March 2020.
• The Liquidated Company was incorporated on 26 February 2020 with another party appointed as the sole director (former director).
• There is no evidence of The Liquidated Company trading and no evidence of The Liquidated Company having entered into any transactions prior to the opening of two bank accounts by the former director on 01 July 2020 and 03 July 2020. The Liquidated Company was therefore not eligible to apply for a Bounce Back Loan.
• The Director was appointed as a sole director on 17 July 2020.
• On 19 July 2020 The Disqualified Director changed the company name.
• On 28 September 2020, the Liquidated Company received a BBL for the amount of £50,000. The balance in the company’s account on 27 September 2020 was £4,785.16.
• Between 02 October 2020 and 14 October 2020 sums totalling £34,025 were transferred to an associated company in which The Banned Director was an appointed director and shareholder. There is no evidence that the funds were applied for the economic benefit of The Liquidated Company.
• Between 06 October 2020 and 07 October 2020 sums totalling to £19,997.58 were transferred to a third-party company in Bulgaria. There is no evidence that the funds were applied for the economic benefit of The Liquidated Company.
• The Liquidated Company was placed into creditors voluntary liquidation on 26 May 2021
• At Liquidation, £69,589 was owed of which £50,000 was in respect of outstanding BBL, £19,589 were to trade creditors.
• On 28 May 2020,the Director Disqualified obtained a Government backed Bounce Back Loan (BBL) totalling £50,000 and The Banned Director as the sole de jure director, caused the Liquidated Company  to apply for a Bounce Back Loan (BBL) of £50,000 to which it was not entitled to and failed to use its entirety for the economic benefit of the business, contrary to the terms of the Bounce Back Loan. In that:
• The BBL scheme criteria allowed a business to borrow between £2,000 and up to 25% of the company turnover (with a maximum loan of £50,000), for the purpose of a business carried on or intended to be carried on by the applicant.
• the Liquidated Company   was incorporated on 13 March 2017 in which The Director and another co-director were appointed as directors on the same day. the Liquidated Company  business was that of the cleaning of textile and fur products.
• Accounts filed at Companies House for the year ending 31 March 2019 show the Liquidated Company  to be insolvent by £1,559, the previous year’s accounts show dormant trading.
• A bank account was opened for the company on 31 December 2018. The statements show that in the year ending 31 March 2020 the Liquidated Company  received credits totalling £34,382. the Liquidated Company  was eligible to borrow a maximum BBL of £8,596
• On 28 May 2020, the company was in receipt of a BBL for the amount of £50,000 which were paid into the company’s bank account.
• Between 28 May 2020 and 01 June 2020 the ocmpany paid £43,181 to third-party company. There is no evidence that the funds were applied for the economic benefit of the company.
• The company was placed into creditors voluntary liquidation on 15 April 2021
• At Liquidation, £67,050 was owed of which £50,000 was in respect of outstanding BBL and £17,50 were to trade creditors,
• Failure to maintain, preserve and or deliver up records
• The Director (ailed to ensure that the Liquidated Company maintained and/or preserved adequate accounting records from 28 May 2020 to 15 April 2021 or in the alternative, has failed to deliver up such records as were maintained to the Liquidator.
• In the absence of the Company records, it has not been possible to determine:
• Whether credits totalling £330,657 received between 13 July 2020 and 18 November 2020 represent legitimate trading receipts that were for bona fide business transactions.
• Whether payments totalling £324,017 made between 28 May 2020 and 6 October 2020 represent genuine company expenses that were for bona fide company transactions.
• What activities, if any, the company actually performed
• What taxation is properly due in relation to an activity The amounts extracted by The Banned Director or any other person, directly or indirectly

The amount due to the company by The Disqualified Director or any other person or business.

Case 38 – Director Disqualification for unsuitable accounting practices, among other offences

Director Disqualified for 9 years by a director signed undertaking.

Between 01 April 2019 and 29 October 2020, The Director Disqualified failed to ensure that The Insolvent Company maintained, preserved or in the alternative failed to deliver up such records to the Liquidator. As a result, it has not been possible to verify:

•  Whether the Bounce Back Loan (BBL) of £48,000, obtained by the company 17 July 2020, was used for the economic benefit of the company.
•  Whether a payment made from one of The Insolvent Company’s bank accounts on 16 July 2020 totalling £2,096 and another payment made on 21 April 2020 totalling £8,275 were part of The Insolvent Company’s normal business expenditure.
•  Whether 43 payments made from one of The Insolvent Company’s bank accounts between 16 April 2019 to 13 July 2020, totalling £69,420 were part of The Insolvent Company’s normal business expenditure.
•  Whether 3 payments made from one of The Insolvent Company’s bank accounts, post BBL, to an unconnected company between 20 July 2020 to 05 October 2020 totalling £35,025 were part of The Insolvent Company’s normal business expenditure.
•  Whether 6 payments made from one of The Insolvent Company’s bank accounts, post BBL, from 22 July 2020 to 05 October 2020 totalling £20,197.75 were part of The Insolvent Company’s normal business expenditure.

 Whether 4 payments made between 12 August 2020 and 05 October 2020, post BBL, to a third-party company totalling £37,345 were for the economic benefit of the company.

Case 39 – Director Disqualification for trading to the detriment of HMRC, among other offences

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

The Director Disqualified caused the Insolvent Company to trade to the detriment of Her Majesty’s Revenue & Customs (HMRC) from 07 January 2020 in respect of Value Added Tax (VAT), when the VAT liabilities for the VAT period ended 11/19 fell overdue for payment, from 23 July 2019 in respect of Pay As You Earn Income Tax and National Insurance Contributions (PAYE/NIC), when the PAYE/NIC liabilities for tax month ended 05 June 2019 fell overdue for payment, and from the 15 May 2019 when Corporation Tax (CT) when the CT liabilities for period 15 August 2017 to 14 August 2018 fell overdue for payment, until The Insolvent Company was placed into liquidation on 30 September 2021.

VAT

• The Insolvent Company submitted VAT returns to HMRC for VAT periods: 11/19, 02/20, 05/20, 08/20, 11/20, 02/21, disclosing VAT liabilities totalling £36,947.
• On 13 October 2020 The Insolvent Company made a payment of £5,338 to HMRC. HMRC applied this to VAT liabilities for the period 11/19. HMRC also applied the VAT refund claim of £1,106 towards this period.
• At Liquidation £16,708 remained unpaid from VAT period 11/19, this fell overdue for payment on 08 January 2020, total liabilities in respect of VAT totalled £30,502.

PAYE/NIC

• The Insolvent Company submitted RTI returns to HMRC each month from tax month ended 05 June 2019 to 05 October 2021 disclosing PAYE/NIC liabilities due to HMRC totalling £66,689.
• Between 23 July 2019 and 30 September 2021 payments were made towards PAYE/NIC totalling £19,074 and employment allowance was received totalling £10,484.
• PAYE/NIC liabilities due and payable to HMRC prior to the date of liquidation totalled £33,877 (excluding interest).

Corporation Tax

• The Insolvent Company submitted Corporation Tax returns to HMRC for periods 15 August 2017 to 14 August 2018, 15 August 2018 to 31 August 2018, 01 September 2018 to 31 August 2019 disclosing Corporation Tax liabilities totalling £12,131 including £4,495 in relation to the director’s unpaid loan account.
• No Corporation Tax return was filed for period 01 September 2019 to 31 August 2020 as such HMRC issued a penalty of £100.
• On 27 November 2019 a payment of £800 was made by The Insolvent Company to HMRC in respect of Corporation Tax. HMRC allocated this to the Corporation Tax period 15 August 2017 to 14 August 2018.
• At liquidation Corporation Tax liabilities due to HMRC prior to the date of liquidation amount to £11,431 (excluding interest)

Differential Treatment

• At the date of liquidation, the total amount owed to creditors is £153,704 of which £82,345 (including interest, penalties and CIS) is claimed by HMRC in respect of VAT, CT and PAYE/NIC and CIS.
• The Insolvent Company’s accounts for the year ended 31 August 2019 show liabilities to:
• Trade and expense creditors of £1,421
• Other creditors £4,871
• Bank loans and overdrafts £9,858
• Hire purchase contracts £9,993
• Tax & Social security £24,541.
• By date of liquidation liabilities to banks had increased to £68,500 due to The Insolvent Company taking a £50,000 Bounce Back Loan (BBL) however all other bodies of creditors had reduced to nil whilst over the same period liabilities to HMRC increased overall by £57,804 from £24,541 to £82,345 (including interest, penalties and CIS).

After last set of accounts for year ended 31 August 2019, £512,051 was paid to various parties including The Banned Director receiving £152,345, whilst over the same period HMRC received a total of £28,286.

Case 40 – Director Disqualification for personal use of a Bounce Back Loan, among other offences

Director Disqualified for 10 years by a director signed undertaking.

On or around 11 May 2020 The Company Director (The Company Director) caused The Dissolved Company (The Dissolved Company) to fraudulently apply for a Bounce Back Loan (BBL) of £15,000, at a time when he knew or ought to have known The Dissolved Company was not eligible for the loan. He applied the BBL funds of £15,000 for his own personal benefit and not for the economic benefit of The Dissolved Company and without the intention to complete timely repayments in the future resulting in the loss to the bank of at least £15,000. He failed to give notice to the bank of the dissolution of The Dissolved Company as required by Section 1006 Companies Act 2006, and breached Section 1004 Companies Act 2006 by trading in the 3 months prior to submission of the application to dissolve The Dissolved Company.

•  The BBL Scheme was open to businesses engaged in trading or commercial activity in the UK at the date of the application and carrying on business on 1 March 2020 who were adversely affected by coronavirus. Businesses could apply for a loan of between £2,000 and £50,000 subject to a maximum of up to 25% of turnover. The turnover figure was self-certified by the applicant. The turnover figure required was that for the calendar year 2019 or where a business was established after 1 January 2019 it is their estimated turnover. Under the BBL scheme businesses were also required to use the loan only to provide economic benefit to the business and confirm that they understood the costs associated with repayment of the loan and that they are able and intend to complete timely repayments in the future.
•  Section 1004 Companies Act lays down the circumstances in which an application to strike off a Limited Company may not be made, one of which is an application under section 1003 (application for voluntary striking off) on behalf of a company must not be made if, at any time in the previous three months, the company has traded or otherwise carried on business,
•  The Dissolved Company’s bank account shows no trading income received after 14 April 2020 and the last payment to a supplier was made on 22 April 2020.
•  On 27 April 2020 the remaining funds in The Dissolved Company’s bank account were paid to him, leaving a nil balance in the account.
•  On 04 May 2020, he signed the DS01 form to apply to dissolve The Dissolved Company
•  On 11 May 2020, he applied for a £15,000 BBL on behalf of The Dissolved Company by which date The Dissolved Company had ceased to trade, in breach of the BBL terms.
•  The Dissolved Company received a BBL of £15,000 on 12 May 2020 and on the same day the full £15,000 was transferred to him.
•  On 05 June 2020, DS01 form to dissolve The Dissolved Company was filed at Companies House thereby breaching Section 1004 of Companies Act 2006 as The Dissolved Company traded until at least 14 April 2020.
•  As of 05 June 2020, the full amount of the BBL remained outstanding
•  The Dissolved Company failed to given notice to the bank of its application for dissolution, thereby breaching Section 1006 of Companies Act 2006.

 On 13 October 2020 The Dissolved Company was dissolved and the BBL of £15,000 remains outstanding.

Case 41 – Director Disqualification for trading to the detriment of HMRC, among other offences

Director Disqualified for 3 years by Order of the Court.

The Director Disqualified whilst a formally appointed director of The Insolvent Company caused The Insolvent Company to trade to the detriment of HM Revenue & Customs (HMRC) in relation to Value Added Tax (VAT) during the period 07 May 2018 to 30 June 2019. In that:

•  During this period The Insolvent Company failed to submit the required VAT returns, the first of which was due on 07 May 2018 following the company’s registration on 07 December 2017.
•  On 2 September 2019, HMRC visited the premises which resulted in HMRC raising assessments based on the data from the company’s card machines (with an allowance for cash takings due to the absence of records) for the period covered by the missed returns, 01 January 2018 to 30 June 2019.
•  The data showed card sales of £1,212,838 for the period and HMRC added 15% to allow for cash sales; having applied a flat rate 12.5% VAT rate, HMRC determined a liability in the sum of £170,820.
•  Company bank statements for the period 7 May 2018 to 30 June 2019 show income of £784,637, payments to HMRC totalling £7,368, payments to suppliers of £327,158 and cash withdrawals of £177,940.
•  At the date of the Liquidation on 11 February 2020 the company owed a total of £327,458, comprised of £311,868 to HMRC (£141,049 in Corporation Tax and £170,820 VAT), £10,590 to suppliers and £5,000 to him.”
• “I failed to ensure that The Insolvent Company (The Insolvent Company) complied with its statutory obligations to make returns when due or meet its financial commitments as regards to Value Added Tax (VAT) and Corporation Tax (CT). As a consequence, I caused The Insolvent Company to trade to the detriment of Her Majesty’s Revenue and Customs (HMRC) in respect of VAT from at least 07 October 2017 to 05 February 2020 and CT from at least 16 October 2017 to 05 February 2020 by failing to make payments as and when due, whilst paying The Insolvent Company’s other creditors, resulting in estimated liabilities to HMRC totalling £111,948 (including interest and surcharges) at that date, in that:

VAT

• On 16 October 2017, HMRC made telephone contact with me to discuss outstanding amounts due to HMRC and outstanding returns.
• As at 16 October 2017, The Insolvent Company’s VAT arrears totalled £19,944. The VAT quarter ending 31 August 2017 was due for payment on 07 October 2017 but remained unpaid at 16 October 2017.
• The Insolvent Company filed nil returns for the quarters ending 31 August 2018 and 30 November 2019. Except for the two nil returns, The Insolvent Company failed to file VAT returns for any quarter after 16 October 2017, the first of which was VAT quarter ending 30 November 2017, due for payment on 07 January 2018. In the absence of returns, HMRC raised 7 VAT assessments during the period totalling £33,627.
• In the period 16 October 2017 and 05 February 2020, one payment of £500 was made on 06 August 2018 towards VAT arrears.
• As at 05 February 2020, The Insolvent Company’s estimated VAT arrears totalled £58,115, comprising VAT of £51,305 and surcharges of £6,810.

CT

• Prior to 16 October 2017, The Insolvent Company failed to make any CT returns, and CT arrears based on HMRC assessments as at 16 October 2017 totalled £49,168.
• In the period 16 October 2017 and 05 February 2020, one payment of £2,000 was made on 13 November 2017 towards CT arrears. The Insolvent Company failed to file CT returns for any period after 16 October 2017, the first of which due was CT return for 2017, due for payment on 01 September 2018.
• As at 05 February 2020, The Insolvent Company’s estimated CT arrears totalled £53,833.

Differential Treatment

• The Insolvent Company’s net income between 16 October 2017 and 05 February 2020 totalled £218,201 including VAT. The Insolvent Company’s net outgoings between 16 October 2017 and 05 February 2020 totalled £231,677, including £98,284 paid to Whitaker and £89,557 was paid to a connected party described as dividends and salary.

As at 05 February 2020, HMRC have filed a claim for £111,948 in respect of VAT and CT. Aside from HMRC, the only other known creditor at liquidation was The Insolvent Company’s bank in respect of an overdrawn account, who claimed £1,373.

Case 42 – Director Disqualification for failing to meet HMRC requirements, among other offences

Director Disqualified for 14 years by Order of the Court.

From 01 February 2016 (the earliest date from which accounts have been prepared) until 14 October 2021 (the date of liquidation), The Disqualified Director caused The Insolvent Company breach its statutory obligation to HM Revenue and Customs (hereinafter referred to as HMRC) by failing to make the required returns or and returns, and also to trade to the detriment of HMRC in respect of VAT and Corporation Tax, in that:

VAT:

•  The Insolvent Company was registered for VAT on 28 January 2015 with an estimated annual turnover of £75,000.00;
•  No VAT returns were submitted for any period between registration and liquidation, as a result HMRC raised 18 central assessments and applied charges totalling £26,558.45 covering VAT periods to August 2019;
•  For the whole period of trading payments totalling £7,227.90 were made towards the VAT assessments and surcharges, with the last payment being made on 04 August 2017;
•  Accounts prepared after The Insolvent Company entered liquidation covering from 01 February 2016 to 13 October 2021 (the day before liquidation) show that at liquidation The Insolvent Company had an outstanding VAT liability of £89,635.19.

Corporation Tax:

•  From 01 February 2016 until liquidation, The Insolvent Company submitted no returns to HMRC in respect of Corporation Tax, resulting in penalties being applied totalling £4,200.00;
•  Accounts and Corporation Tax calculations produced after The Insolvent Company entered liquidation show that between 01 February 2016 and 13 October 2021 The Insolvent Company achieved total profit of £397,184.00, and during the same period incurred a total Corporation Tax liability of £164,461.94, comprised of tax on profits, and tax on The Insolvent Company’s Director’s Loan Account;
•  No payments have been made to HMRC in respect of Corporation Tax or penalties and the full amount remains outstanding;

Comparative treatment:

 Accounts prepared after The Insolvent Company entered liquidation show that from 01 February 2016 to 13 October 2021 he received funds from The Insolvent Company’s Directors Loan Account totalling £261,753.00, and remuneration totalling £43,452.00.

Case 43 – Director Disqualification for using false information to aqcuire a Bounce Back Loan, among other offences

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

On 28 September 2020 The Banned Director caused the insolvent company to breach the conditions of the Bounce Back Loan (BBL) Scheme by obtaining a £50,000 BBL that the insolvent company was not entitled to, by providing false information as to the trading of the company as at March 2020 when the company was not incorporated at such date and subsequently failed to evidence that the BBL funds were used for the economic benefit of the insolvent company.

In that:

• The Director is the sole director of the insolvent company
• The BBL Scheme allowed a business to apply for a loan of between £2,000 and £50,000 subject to a maximum of up to 25% of turnover in the calendar year 2019.
• The terms of the BBL scheme were that a company incorporated after 01 January 2019 could base an application for a BBL on estimated annual turnover but conditional that the company was trading on 01 March 2020. the insolvent company was not trading at that date so was not entitled to apply for a BBL.
• BBL Scheme conditions also stated that for a business to apply for a loan, the turnover figure, even if self-certified by the applicant with no checks or evidence required, could not be over-estimated by more than 25% in order to obtain a larger loan.
• Bounce Back Loan Scheme conditions state that funds are to be used for the economic benefit of the business
• the insolvent company was incorporated on 22 June 2020
• The first activity in the insolvent company Bank account was on 14 August 2020
• On 24 September 2020 The Director signed and dated a BBL application with a financial institution, in which by signing he declared ‘I/We confirm that my/our business was carrying on its business on 1 March 2020, that I was/ we were engaged in trading or commercial activity in the United Kingdom as at the date of this application and the business has been adversely impacted by COVID-19.
• On 28 September 2020 BBL funds of £50,000 was credited into the insolvent company’s bank account.
• Between 29 September 2020 and 12 March 2021 a total of £53,200 was transferred to The Director’ personal account from the insolvent company’s bank account. The Banned Director has stated this was not for the economic benefit of the insolvent company.
• At the date of the Liquidation on 28 October 2021, a total of £50,864 was owed to creditors, of which £50,000 was the bounce back loan and £864 was owed to HMRC.
• From 22 June 2020 when the insolvent company was incorporated until liquidation, The Disqualified Director failed to ensure that the insolvent company maintained or preserved adequate accounting records or in the alternative failed to deliver up such records to the liquidator.
• In the absence of any account accounting records delivered up to the Liquidator it has not been possible to;
• Verify the quantum of The Director’ director loan account
• Establish the dates of and sources of credits totalling £27,346 shown in the insolvent company bank statements between the account opening on 14 August 2020 and 29 April 2021
• Establish the dates and purposes of the debits totalling £77,333 shown in the insolvent company’s bank account and if the withdrawals were for the economic benefit of the company.
• Verify the true asset position of the company at liquidation as declared as Nil on the statement of affairs signed by The Director on 18 October 2021.

Verify the true deficiency of the company at liquidation as the statement of affairs signed by The Banned Director on 18 October 2021 stated there being only two creditors totalling £50,864.

Case 44 – Director Disqualification for failing to meet fiduciary requirements and paying HMRC

Director Disqualified for 10 years by a director signed undertaking.

From no later than May 2015 to cessation of trade in November 2019, The Disqualified Director failed to ensure that The Banned Director The Insolvent Company (the Company) complied with its statutory obligations to submit payments in respect of Construction Industry Scheme (CIS), PAYE/NIC and Corporation Tax (CT) liabilities and caused the company to trade to the detriment of HM Revenue & Customs (HMRC). In that:

PAYE/NIC/CIS

• HMRC has claimed the sum of £71,065 in respect of unpaid CIS tax and £3,092 in respect of PAYE/NIC plus interest of £597 and penalty charges of £1,700 comprising:
• CIS of £5,458 for the tax year 2014/15 that should have been paid in full by 22 May 2015;
• £8,870 for the tax year 2015/16 that should have been paid in full by 22 May 2016, included CIS of £8,476 and PAYE of £394;
• £37,063 for the tax year 2018/19 that should have been paid in full by 22 May 2019 included CIS of £35,171 and PAYE of £1,892; and
• £22,737 for the tax year 2019/20 including CIS of £21,960 and PAYE of £777.

Corporation Tax

• HMRC are owed £15,433.20 plus interest of £128.15 for unpaid CT and associated interest that has accumulated as follows:
• Net CT of £5,917 due for the accounting year ended 31/01/2015 that should have been paid in full by November 2015;
• CT of £9,516 due for the accounting year ended 31/01/2016 that should have been paid in full by November 2016;
• The last payment made by the Company toward CT was on 29 January 2016 which was allocated to the CT accrued in the accounting year ended 31/01/2015.

Comparative Treatment

• Prepared accounts showed trade creditors of £3,435 and other creditors £4,840 for the year ending 31 January 2016, no trade creditors and other creditors of £960 for 2017, 2018 and 2019.
• The Company bank statements from 10 March 2017 to cessation of trading in November 2019 show that having received the sum of £1,488,123 the Company failed to make a single payment to HMRC in respect of the Company’s CIS/PAYE/NIC and Corporation Tax liabilities.

At the date of Liquidation, the company had liabilities of £174,176, with HMRC owed a total of £171,926 and the director being the only other creditor for £2,250.

Case 45 – Director Disqualification for failing to pay VAT, among other offences

Director Disqualified for 3 years by an undertaking agreed by the director.

The Disqualified Director caused or allowed The Insolvent Company to trade to the detriment of HM Revenue & Customs (HMRC) in respect of VAT from at least 07 My 2018 and in respect of PAYE/NI from at least 22 April 2018 so that as at the date of Liquidation, IC had an outstanding liability of at least £202,288.87

VAT:

• The Insolvent Company registered for VAT starting on 01 September 2015, to submit quarterly returns.
• As at 06 May 2018, owed £101,693.82 in respect of VAT
• For periods ending 03/18 to 06/19 no returns were made and assessments totalling £127,899.00, as well as surcharges of £16,442.00 were raised by HMRC.
• Two payments were made against the outstanding liability on 02 July 2018 (£15,000.00) and 28 September 2018 (£9,000.00), so that as at the date of liquidation the total amount outstanding to HMRC in respect of VAT was £202,288.87

PAYE/NI

• As at 22 April 2018 IC owed the sum of £62,274.42 to HMRC in respect of unpaid PAYE/NIC
• The Insolvent Company submitted Real Time Information returns for the year 2018/2019, the earliest return being due for payment on 22 April 2018, totalling £11,717.01, a payment of £1,270.24 was made against the outstanding liability, so as at the date of liquidation IC had an outstanding liability in respect of PAYE/NI/Student Loans of £73,081.07. No other payments were made in respect of PAYE/NIC.

Comparative treatment:

• Between 01 January 2018, the date since the last set of accounts and 28 August 2019, the date of liquidation, excluding contra entries and intra account transfers, £428,711.04 was paid out of the bank account. Of which:
• £248,626.76 was paid to trade and for business expenses; £79,365.00 was paid for wages; £52,573.78 appears to have been paid in direct payments to the director or for what appears to be to his benefit; £36,875.26 has been paid to the other directors; £11,270.24 paid to HMRC.

At liquidation, HMRC was owed the total sum of £315761.04 of which £275,369.94 related to unpaid VAT and PAYE/NI. Other creditors were owed £7,695.84.

Case 46 – Director Disqualification for personal use of a Bounce Back Loan, among other offences

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

The Director Disqualified caused The Liquidated Company (The Liquidated Company) to breach the conditions of the Bounce Back Loan (BBL) Scheme by removing £20,000 of the £25,000 BBL funds for the benefit of himself and not for the economic benefit of the company. In that:

• Under the BBL scheme businesses were required to use the loan only to provide economic benefit to the business, and not for personal purposes and confirm they have understood the costs associated with repayment of the loan and that they are able and intend to complete timely repayments in future.
• The Liquidated Company received BBL funds of £25,000 on 19 May 2020 increasing the available bank balance to £26,958
• On 22 May 2020 £20,000 was transferred to The Director. No evidence has been supplied to show that the payment of £20,000 was used for the economic benefit of The Liquidated Company.
• On 14 July 2020 a striking off application was signed by The Banned Director and was filed at Companies House on 21 July 2020.
• On 13 October 2020 The Liquidated Company was dissolved and the BBL of £25,000 remains outstanding.
• The Banned Director caused The Liquidated Company (The Liquidated Company) to breach Sections 1004 and 1006 of the Companies Act in that:
• Under Section 1004 of the Companies Act an application to strike off a The Liquidated Company Company may not be made, if, at any time in the previous three months, the company has traded or otherwise carried on business;
• On 21 July 2020 a striking off application was signed by The Banned Director and filed at Companies House on 14 July 2020. The Banned Director subsequently caused The Liquidated Company to breach Section 1004 of Companies Act 2006 as The Liquidated Company traded until at least 4 September 2020;

The Liquidated Company failed to give notice to the bank of its application for dissolution as required under Section 1006 of the Companies Act 2006

Case 47 – Director Disqualification for failing to provide sufficient records to the liquidator, among other offences

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

From 08 November 2019 (date of incorporation) to 10 August 2021 (date of insolvency) The Disqualified Director failed to ensure that The Insolvent Company Limited (The Insolvent Company) maintained and/or preserved or in the alternative failed to deliver up such records to the Liquidator. As a result, it has not been possible to verify:

• The Insolvent Company’s true turnover and whether they were entitled to the £50,000 Bounce back Loan (BBL) funds received on 09 June 2020.
• Whether the BBL of £50,000, obtained by The Insolvent Company 09 June 2020 was used for the economic benefit of the company.
• Whether 1 x payment made from The Insolvent Company’s bank account to an unconnected company totalling £5,000 on 31 July 2020 was part of the normal business expenditure of The Insolvent Company.
• Whether 1 x payment made from The Insolvent Company’s bank account to an unconnected company totalling £6,084 on 03 August 2020, was used to purchase a kitchen appliance to transform The Insolvent Company’s trading premises into a take-away outlet, as stated by The Director. It has not been possible to verify if this payment was part of The Insolvent Company’s normal business expenditure nor if the kitchen appliance was purchased as an asset of The Insolvent Company, and if so what has happened to this asset.
• Whether 1 x payment made from The Insolvent Company’s bank account to a connected company (of which The Banned Director was also director) totalling £19,000 on 14 August 2020, was part of the normal business expenditure of The Insolvent Company.
• Whether 3 x payments made from The Insolvent Company’s bank account to an unconnected company currently trading from the same address and totalling £11,324 were part of the normal business expenditure of The Insolvent Company. The 3 payments were made as follows:
• 17 August 2020 – £5,000
• 28 August 2020 – £3,564
• 13 October 2020 – £2,760

Whether 1 x payment made from The Insolvent Company’s bank account to an unconnected company totalling £5,000 on 21 September 2020 was part of the normal business expenditure of The Insolvent Company.

Case 48 – Director Disqualification for personal use of a Bounce Back Loan, among other offences

Director Disqualified for 3 years by a director signed undertaking.

The Disqualified Director failed to ensure that The Insolvent Company UK Ltd (‘TLP’) complied with its statutory obligations to HM Revenue & Customs (‘HMRC’) failing to meet its financial commitments as regards payment of VAT, Corporation Tax (‘CT’) and PAYE/NIC and causing TLP to trade to the detriment of HMRC and to his own benefit from at least 07 March 2018, when VAT for the quarter ended January 2018 fell due, to TLP’s liquidation on 16 June 2020. As a consequence HMRC have submitted a claim in the liquidation for £194,195. In that:

•  At the liquidation date VAT remains unpaid from the quarter ended January 2018, due for payment by 07 March 2018 and total VAT outstanding was £31,442;
•  CT accrued from the years ended 28 February 2018 and 2019 and a total of £147,256 remains due;
• A further £31,749 in CT was incurred from profits in the year to 28 February 2020, but this was not included in HMRC’s claim;
•  PAYE/NIC of £8,405 was unpaid at the liquidation date, from the tax year 2019/20.

Comparative treatment

•  Accounts for the year ended 28 February 2018 show that HMRC was owed £89,045, by the liquidation date at least £194,195 was due;
•  Trade and other creditors were owed £2,752 in February 2018 and £4,550 at the liquidation date.
•  His overdrawn director’s loan account increased from £132,717 in February 2018 to £294,339 at the liquidation date, in addition to salary and dividends of £197,385 from 01 March 2018;

 Bank statements show total payments £692,427 from 01 March 2018 to 28 February 2020 of which:

• He received £392,475 (net);
• Cash withdrawals were £1,330;
• Payments which appear to be personal were £49,228; and
• HMRC was paid £38,698.

Case 49- Director Disqualification for improper remuneration, among other offences

Director Disqualified for 7 years by Order of the Court.

The Disqualified Director and his wife took drawings from The Insolvent Company resulting in an overdrawn directors’ loan account (‘DLA’). He subsequently caused The Insolvent Company to declare dividends of £265,988 in the year to 30 June 2017 to off-set the DLA, at a time when it had no distributable reserves with which to make such payments. This was to The Banned Director’s and his wife’s benefit and to the detriment of creditors. In that:

• The Banned Director was appointed as a director of The Insolvent Company on 03 June 2016;
• the accounts to 30 June 2016 show net liabilities of £435,460 and a shortfall on the profit and loss account of £435,560;
• these accounts also disclose an overdrawn DLA of £94,049;
• in the following year, to 30 June 2017, The Insolvent Company made a profit of £211,507;
• the directors drew £203,155 in the year, which was off-set by dividends of £265,988 together with reallocation of £92,345 due to an associated company, resulting in a credit balance of £61,131 at 30 June 2017;
• the accounts show a resulting shortfall on the profit and loss account of £490,041;
• the accounts show that creditors were owed £705,830 at 30 June 2016 and £1,061,497 in the liquidation.
• The Director caused further drawings by the directors to be off-set by the entry of salaries totalling £94,085 in May 2018. This increased the liability to HMRC in respect of PAYE and NIC at a time when the company had been in arrears to HMRC since January 2017 and had made no payments to HMRC since April 2017. This transaction was to The Banned Director’s and his wife’s benefit and to the detriment of creditors, primarily HM Revenue & Customs (‘HMRC’) which is owed at least £299,809 in the liquidation. In that:
• the directors withdrew £153,666 (net) from 01 July 2017 to the liquidation;
• on 31 May 2018 salaries for and The Director for May 2018, totalling £94,085, were credited to the DLA, leaving a credit balance of £1,549;
• the accounts show that HMRC was owed £56,529 at 30 June 2016 and it has claimed £467,504 in the liquidation; at least £299,809 is due to HMRC.
• The Disqualified Director failed to ensure that The Insolvent Company met its financial commitments as regards VAT and PAYE/NIC and caused The Insolvent Company to trade to the detriment of HMRC and to his own benefit from at least January 2017 when VAT for the quarter to November 2016 fell due, to its liquidation in July 2018. As a consequence HMRC is owed at least £299,809 in the liquidation. In that:
• At the liquidation date £153,837 was outstanding for VAT which had accrued from November 2016, this should have been settled by 07 January 2017;
• PAYE/NIC was outstanding from the tax year 2015/16, HMRC has claimed £298,676 and ISL’s records show at least £130,981 was due;
• No payments were made to HMRC after April 2017;
• At 30 June 2017 the accounts show that HMRC was owed £111,556 and other creditors were owed £594,274. At the liquidation date other creditors were owed £593,993.
• HMRC have claimed £467,504, it is owed at least £299,809 including interest and surcharges;

Bank statements show that payments of £988,428 were made from 01 July 2017 to the liquidation, no payment was made to HMRC in this period.

Case 50 – Director Disqualification for failing to meet legislative requirements for staff, among other offences

Director Disqualified for 8 years by a director signed undertaking.

The Disqualified Director breached his duties as a director of The Insolvent Company Limited (The Insolvent Company) by failing to ensure that it complied with legislative requirements in that:

• The Insolvent Company did not comply with its statutory obligations under The Immigration, Asylum and Nationality Act 2006 by employing 2 people who did not have the right to work
• Following a visit from Home Office Immigration Officers on 16 October 2019, during which this breach was discovered, The Insolvent Company was issued with a penalty notice in the sum of £30,000, towards which The Insolvent Company’s made payments totalling £1,666.68, resulting in £28,333.32 remaining unpaid;
• The Banned Director was the sole appointed director of The Insolvent Company at the time of the breach of the Immigration, Asylum and Nationality legislation.

(2) Bounce back Loan

• The Disqualified Director caused The Insolvent Company to apply for a Government backed Bounce Back Loan (BBL) totalling £50,000 and failed to use the BBL in its entirety for the economic benefit of the business. In that:
•  The Government backed BBL scheme required the applicant to undertake that the BBL funds were to be used for the economic benefit of the business and should not have been used for personal purposes.
•  The Insolvent Company applied to the Bank for a BBL in the sum of £50,000 on 4 May 2020.
•  The BBL was received into The Insolvent Company’s bank account on 6 May 2020. The balance on the account prior to receipt of the BBL was £5,977.62.
•  Between 6 May 2020 and 20 May 2020, The Insolvent Company received £6065.17 into its bank account giving total available funds of £62,042.79
•  In this same period, unidentified cash/counter withdrawals were made from The Insolvent Company’s bank account totalling £61,600
•  The Banned Director claims that funds were used to pay for business expenses, however no evidence has been provided in support of this claim.
•  Information provided by the bank confirms the overdrawn balance on The Insolvent Company’s BBL bank account on liquidation was £50,737.49.

(3) Accounting records

• Between 01 February 2020 and 30 October 2020, The Director failed to ensure that The Insolvent Company maintain and/or preserved adequate accovent Company to HM Revenue & Customs in respect of Value Added Tax and Pay As You Earn.
• The Director caused The Insolvent Company to apply for a Government backed Bounce Back Loan (BBL) totalling £50,000. and failed to use the BBL in its entirety for the economic benefit of the business. In that:
• The Government backed BBL scheme required the applicant to undertake that the BBL funds were to be used for the economic benefit of the business and should not have been used for personal purposes.
• RK Southwest applied to the Bank for a BBL in the sum of £50,000 on 4 May 2020.
• The BBL was received into RK Southwest’s bank account on 11 May 2020. The balance on the current account prior to receipt of the BBL was £9.08.
• Between 11 May 2020 and 29 May 2020 RK Southwest received £49,255.46 into its bank account giving total available funds of £99,264. Between 11 May 2020 and 29 May 2020, unidentified cash/counter withdrawals were made from RK Southwest’s bank account totalling £86,710 and £14,916.90 was used to pay business expenses and creditors. On this basis, The Director is considered to have failed to use the sum of £35,074.02 for the economic benefit of RK Southwest.
• The Banned Director claims that funds were used to pay for business expenses, however no evidence has been provided in support of this claim.
• Information provided by the bank confirms the overdrawn balance on RK Southwest’s BBL bank account was £50,737.49.

(1) Accounting records

• Between 06 December 2019 and 22 December 2021, The Banned Director failed to ensure that RK Southwest maintain and/or preserve adequate accounting records or in the alternatively has failed to deliver up such records as were maintained. As a consequence, it has not been possible to:
• Verify the reason for cash and counter withdrawals as identified in RK Southwest’s bank statements in the sum of at least £710,919.84 and whether these were applied for the benefit of RK Southwest
• Verify the amount owing by RK Southwest to HM Revenue & Customs in respect of Value Added Tax and Pay As You Earn.

The validity of purchase invoices in the total sum of £226,337.66

Case 51 – Director Disqualification for non-payment of PAYE/NI, among other offences

Director Disqualified for 11 years by a director signed undertaking.

The Disqualified Director caused or allowed The Insolvent Company (The Insolvent Company) The Insolvent Company hereinafter referred to as The Insolvent Company) to trade to the detriment of HMRC in respect of CIS, PAYE/NI from 01 May 2020 and in respect of VAT from 7 May 2020, so as at the date of Liquidation The Insolvent Company had an outstanding liability with HMRC of at least £468,452.20.

• Between May 2020 and July 2021 The Insolvent Company deducted £222,752.67 of PAYE and £23,365.35 of CIS that was due to be paid over to HMRC. A further £4,593.99 was incurred related to interest, penalties and charges resulting in a total of £250,712.01 being due to be paid to HMRC throughout the period
• Between May 2020 and July 2021 The Insolvent Company had Employer Payment Submission deductions totalling £64,161.34 that would be deducted from the amount owing to HMRC.
• The Insolvent Company made a single payment totalling £7,551.78 toward the amounts outstanding to HMRC between May 2020 and July 2021 so as at the date of Liquidation £313,172.48 remained outstanding to HMRC in respect of PAYE/NIC and CIS

VAT

• For all periods from 01/13 to 12/19 (29 periods) Returns were submitted mostly on time and all payments made in full.
• For periods 03/20 to 03/21 (5 periods) 3 returns were submitted totalling £91,550.75. Surcharges totalling £2,954.45 were levied relating to those returns. No payments were made towards those returns or surcharges.
• During the same period 2 assessments were raised by HMRC as no returns were submitted and those assessments totalled £49,956.00. Surcharges totalling £4,718.50 were levied relating to those assessments. No payments were made towards the assessments or the surcharges.
• As at the date of Liquidation The Insolvent Company had incurred a liability in respect of VAT with HMRC of £149,179.70

Comparative treatment:

• Finalised accounts for the year ending 31 March 2019, show trade and other creditors were £174,228 and reduced to £76,238 as at the date of liquidation. Taxation and Social Security creditors were stated as £152,576, which increased to £468,452.20.
• Between 01 May 2020, and 09 July 2021, the date of liquidation, excluding contra entries, £1,585,891.67 was paid out of the bank account. Of which;
• £725,728.17 was paid to trade and for business expenses;
• £426,190.62 was paid for wages;
• £244,700.00 has been transferred to other company accounts,
• £112,615.53 has been paid in direct payments to Barry Bassett or for what appears to be to his benefit;
• £69,105.57 has been paid in direct payments to The Banned Director or for what appears to be to his benefit; while

£7,551.78 has been paid to HMRC.

Case 52 – Director Disqualification for inadequate accounting, among other offences

Director Disqualified for 3 years by an undertaking agreed by the director.

From 09 July 2019 when the company was incorporated, The Director Disqualified failed to ensure that BD maintained or preserved adequate accounting records or in the alternative failed to deliver up such records to the Liquidators.

• In the absence of any accounting records delivered up to the Liquidators it has not it has not been possible to.
• Verify the purpose of the £286,075 withdrawn from the company bank account between 09 July 2019 and 02 November 2020, made by way of 199 bank transfers to The Director.
• If cash withdrawals from both bank accounts totalling £315,357 between 09 July 2019 and 02 November 2020 were for the benefit of the company.
• Verify the use of the £30,000 bounce back loan paid into the company bank account on 11 May 2020.
• Verify if all the company’s income from 09 July 2019, was declared to HMRC for tax purposes.
• Ascertain the true asset and financial position at the point of liquidation, and if any recoveries can be made by the liquidator.

If the payments made from the account were to the detriment of HMRC and other creditors

Case 53- Director Disqualification for entirely personal use of a Bounce Back Loan, among other offences

Director Disqualified for 8 years by a director signed undertaking.

On 01 June 2020 The Disqualified Director caused The Insolvent Company to misuse the Bounce Back Loan scheme (BBL), by using £50,000 obtained through the scheme in its entirety for his personal benefit rather than for the economic benefit for the business, in that:

• On 20 May 2020, The Director applied for a BBL of £50,000;
• On the BBL application The Banned Director signed a declaration confirming that the BBL would be used wholly for business purposes and not personal purposes;
• On 22 May 2020 a £50,000 was paid into one of The Insolvent Company’ business bank accounts;
• On 01 June 2020 £50,000 was paid to The Director’s bank account via three transactions as follows: £7,500 Ref: Car, £15,000 Ref: Maintaincesic, and £27,500 Ref: Car;
• The Insolvent Company entered liquidation on 22 February 2021 holding assets with a book value of £8,657;
• The BBL of £50,000 has not been repaid.
• From at least 30 June 2017, The Banned Director failed to ensure The Insolvent Company  (The Insolvent Company) registered for VAT after trading in excess of the VAT threshold and caused The Insolvent Company to trade to the detriment of HM Revenue & Customs (HMRC) by failing to submit any VAT returns or make any payment to HMRC in respect of VAT, in that:
• Bank statements have been obtained for The Insolvent Company’ three bank accounts covering the period from 10 February 2017 to its liquidation;
• These bank statements show between 10 February 2017 and 30 June 2017 The Insolvent Company received credits from customers totalling £85,308.98, during the same year the VAT threshold was £85,000, and therefore the latest they should have been registered from 30 June 2017;
• The Insolvent Company submitted a VAT registration form to HMRC on 14 October 2019, advising its turnover had exceeded the taxable turnover threshold on 30 June 2019 declaring an estimated annual turnover of £95,000;
• After registering for VAT The Insolvent Company submitted no returns to HMRC, and assessments were raised by HMRC for VAT periods 11/19 to 11/20 totalling £245,604;
• Between 10 February 2017 and its liquidation The Insolvent Company’ bank accounts received credits from customers totalling £1,112,249.14. The accounting records are not sufficient to establish the true amount owed to HMRC.
• The Banned Director failed to ensure The Insolvent Company maintained, and/or preserved, or in the alternative delivered up accounting records to the liquidator from at least 10 February 2017 (the earliest date covered by bank statements obtained), as a consequence it has not been possible to:
• Verify that all income has been recorded and accounted for;
• Calculate the true liability owed to HMRC in respect of VAT, in the absence of any VAT returns for the entire period of trading;
• Verify the purpose of cash withdrawals totalling £718,627.15 from The Insolvent Company’ bank accounts;

Establish the value of payments made to The Banned Director and staff of The Insolvent Company.

Case 54 – Director Disqualification for fraudulent applications for a Bounce Back Loan, among other offences

Director Disqualified for 7 years by a director signed undertaking.

On 15 June 2020 The Company Director caused The Dissolved Company to fraudulently apply for a Bounce Back Loan (BBL) of £30,000, when he knew or ought to have known that The Dissolved Company was not eligible under the scheme, and failed to give notice to the bank and HM Revenue and Customs of the dissolution of The Dissolved Company as required by Section 1006 Companies Act 1986;

• Under the BBL scheme businesses could apply for a loan of between £2,000 and £50,000 subject to a maximum of up to 25% of turnover. To be eligible under the scheme businesses were required to declare they were engaged in trading or commercial activity in the UK at the date of the application, were carrying on business on 1 March 2020 and were adversely affected by coronavirus.
• The Dissolved Company was incorporated on 20 September 2018.
• On 21 January 2020 The Company Director signed notice DS01 Striking off Application by a company.
• On 24 January 2020, Companies House received a notice to dissolve the company which was signed by The Company Director.
• The Company Director confirmed The Dissolved Company ceased trading in February 2020
• On 15 June 2020 The Company Director signed a BBL loan agreement on behalf of The Dissolved Company who received £30,000 in respect of a BBL on 16 June 2020.
• The Company Director failed to give notice to the bank and HM Revenue and Customs of the dissolution as required by Section 1006 of the Companies Act 1986.

On 22 September 2020, the company was dissolved, at which time SM The Dissolved Company’s bankers were creditors for £30,000, the full amount of the BBL.

Case 55- Director Disqualification for wrongful application for a Bounce Back Loan, among other offences

Director Disqualified for 11 years by a signed undertaking of the director.

The Director caused the Liquidated Company to apply for a Bounce Back Loan (BBL) of £45,000, when he knew or ought to have known that the Liquidated Company was not eligible under the scheme as the Liquidated Company was not trading at 01 March 2020 or at the time The Disqualified Director made the BBL application, contrary to the BBL scheme terms and conditions. The BBL funds were paid to The Banned Director personally and were not used for the economic benefit of the company. The Banned Director failed to give notice to the bank of the dissolution of the Liquidated Company as required by Section 1006 of The Companies Act 2006.

• Under the BBL scheme the applicant must be carrying on business on 01 March 2020 and at the time of the BBL application and had to self-certify that they will use the loan only to provide economic benefit to the business and not for personal use. The turnover figure required was that for the calendar year 2019 or where a business was established after 1 January 2019 it is their estimated turnover and confirm they have understood the costs associated with repayment of the loan and that they are able and intend to complete timely repayments in future
• the Liquidated Company filed dormant accounts for the years ending 30 April 2019 and 30 April 2020 and therefore was not trading as at 01 March 2020. Bank account statements shows that the Liquidated Company was not trading at the time of the BBL application.
• On 08 May 2020, the Liquidated Company applied to its bank for a BBL for £45,000 stating its turnover to be £180,000.
• On 09 May 2020, the Liquidated Company received £45,000 in respect of the BBL, increasing the available bank balance to £45, 025
• On 12 May 2020, £45,000 was transferred to The Banned Director’s personal bank account.
• On 14 April 2021 The Director signed notice DS01 Striking off Application by a company, which was received at Companies House on the same date.
• The Banned Director failed to comply with section 1006 of the Companies Act 2006 as he failed to notify the bank of his intention to dissolve the Liquidated Company .
• The company was dissolved on 02 December 2021, as at which time the full amount of £45,000 of the BBL remained outstanding.

Case 56 – Director Disqualification for multiple false applications for a Bounce Back Loan, among other offences

Director Disqualified for 10 years by a director signed undertaking.

The Director Disqualified caused The Insolvent Company (The Insolvent Company), IC 2 (IC2) and IC 3 (IC3) to apply for Bounce Back Loans (BBL) of £50,000 for each company between May 2020 and November 2020 using overstated turnover figures in the application forms. Consequently The Insolvent Company, IC 2 and IC 3 received more monies than they were entitled to from the BBL scheme, in that:

• On 17 June 2020 The Insolvent Company applied for a BBL of £50,000 to which it was not entitled. A business could apply for a loan of between £2,000 and £50,000 subject to a maximum of up to 25% of turnover in the calendar year 2019. In the application The Insolvent Company turnover was stated as £320,000.
• Accounts filed at Companies House for year ending 31.01.2020 shows turnover in that period as £635.
• Bank statements provided for the period 01 May 2020 to 25 March 2021 show £31,000 withdrawn in a number of cash withdrawals and £5,000 paid to ‘The Director  Expenses’.
• The Banned Director has stated he used money obtained from the BBL to repay a personal loan of £174,000 owed to a 3rd party. Receipt of settlement dated 08 October 2020.
• On 21 February 2021 The Director filed application at Companies House to strike off The Insolvent Company which application was suspended on 4 March 2021.
• On 14 May 2021 The Insolvent Company entered Creditor’s Voluntary Liquidation (CVL) with total liabilities of £53,000, stated as £50,000 BBL and £3,000 owed to The Director.
• On 14 May 2020 IC2 applied for a BBL of £50,000 to which it was not entitled. A business could apply for a loan of between £2,000 and £50,000 subject to a maximum of up to 25% of turnover in the calendar year 2019. In the application IC2 turnover was stated as £250,000.
• HSBC BBL application form states I/We confirm that my/our business was carrying on its business on 01 March 2020 that I was/we were engaged in trading or commercial activity in the United Kingdom as at the date of this application, and the business has been adversely affected by Covid-19. The Banned Director has confirmed that the only contract the company was and would be engaged with for the foreseeable future was a development in Romania, not the UK.
• Accounts filed at companies house for year ending 31.01.2020 shows turnover in that period as £3,400.
• Bank statements provided for the period 02 April 2020 to 23 July 2021 show at least £51,620 withdrawn in a number of cash withdrawals (ATM, CHQ, Counter) and £75,125 paid to ‘S Expenses and Expenses’.
• The Director has stated he used money obtained from the BBL to repay a personal loan of £174,000 owed to a 3rd party. Receipt of settlement dated 08 October 2020.
• On 21 February 2021 The Banned Director filed an application at Companies House to strike off IC 2 which application was suspended on 4 March 2021.
• On 14 May 2021 IC 2 entered CVL with total liabilities of £53,000, stated as £50,000 BBL and £3,000 owed to The Director Disqualified.
• On 21 September 2020 The Insolvent Company obtained a BBL of £50,000 to which it was not entitled. A business could apply for a loan of between £2,000 and £50,000 subject to a maximum of up to 25% of turnover in the calendar year 2019. In the application The Insolvent Company turnover was stated as at least £200,000.
• Accounts filed at Companies House for year ending 31.01.2020 shows turnover in that period as £654.
• Bank statements provided for the period 20 January 2020 to 17 March 2021 show £26,400 withdrawn in a number of cash withdrawals and £11,893 paid to ‘ The Director and Director  Expenses’.
• The Director Disqualified has stated he used money obtained from the BBL to repay a personal loan of £174,000 owed to a 3rd party. Receipt of settlement dated 08 October 2020.
• On 21 February 2021 The Director filed an application at Companies House to strike off The Insolvent Company Civil Engineering The Insolvent Company which application was suspended on 4 March 2021.
• On 14 May 2021 The Insolvent Company entered CVL with total liabilities of £53,000, stated as £50,000 BBL and £3,000 owed to The Banned Director.
• The Director caused The Insolvent Company (Yorkshire Site) to apply for a Bounce Back Loan (BBL) of £50,000 in November 2020 using overstated turnover figures in the application form. Consequently IC  received more monies than it was entitled to receive from the BBL scheme. Furthermore, in the period 8 -15 March 2021, after he had applied for IC to be struck off Companies House Register, The Banned Director caused IC to make a number of transactions totalling £110,635 which were to the detriment of the company creditors, in that:
• On or around 01 November 2020 IC obtained a BBL of £50,000 to which it was not entitled. A business could apply for a loan of between £2,000 and £50,000 subject to a maximum of up to 25% of turnover in the calendar year 2019. In the application IC turnover was stated as £230,000.
• Accounts filed at Companies House for year ending 31.01.2020 shows IC as being dormant.
• Company bank statements (‘bank account 1’) for the period 22 May 2020 to 09 June 2021 show at least £4,650 withdrawn in a number of cash withdrawals and £9,995 paid to ‘The Banned Director  Expenses’.
• On 21 February 2021 The Director filed an application at Companies House to strike off IC which application was suspended on 4 March 2021.
• Company bank statements (‘bank account 2’) for date of opening on 09 March 2020 to 15 March 2021 show £24,150 withdrawn in a number of cash withdrawals and £134,970 paid to ‘The Director Expenses’ of which £110,635 was paid to ‘The Director Expenses’ between 08 March 2021 and 15 March 2021.

On 14 May 2021 IC entered CVL with total liabilities of £53,000, stated as £50,000 BBL and £3,000 owed to The Banned Director.

Case 57 – Director Disqualification for inadequate accounting practices, among other offences

Director Disqualified for 10 years by a director signed undertaking.

In the period between 1 January 2019, the day following the last accounts filed at Companies House and the date The Insolvent Company entered liquidation on 20 March 2020, the Defender 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 Liquidators. The result of which is that it has not been possible to verify the following:

• Whether receipts into the The Insolvent Company bank accounts, totalling £63,823 are a true representation of all the company’s sales and whether the income was used for the benefit of the company.
• The level of expenditure paid out by The Insolvent Company.
• Whether the debtors included in the Accounts at 31 December 2018 have been collected for the benefit of The Insolvent Company . While the Defender has provided partial records to the Liquidators which disclose debtors totalling £369,712, including an amount of £137,355 owed by a connected company, in the absence of adequate records it is not possible to verify the figure or that the debtors between 31 December 2018 and the date of liquidation have been collected for the benefit of the company.
• What happened to Fixed Assets totalling £137,340 shown in the Accounts at 31 December 2018.

The true financial position of The Insolvent Company between 1 January 2019 and the date of liquidation.

Case 58- Director Disqualification for personal use of a Bounce Back Loan, among other offences

Director Disqualified for 3 years by an undertaking agreed by the director.

During June 2020 The Insolvent Company applied for a Government backed Bounce Back Loan (BBL) of £50,000.00. Between 9th and 12th June 2020 The Director Disqualified caused or allowed funds totalling £32,136.44 from the loan to be used contrary to the terms of the BBL scheme from the company account for both his and his co-director’s personal benefit, with no economic benefit to the business.

•  During June 2020 the company made an application to a financial institution for a BBL in the amount of £50,000.00.
•  On 9th June 2020 the company received £50,000.00 into its bank account in relation to the BBL.
•  On 9th June 2020 five payments totalling £21,970.03 were paid out of the company bank account, for the benefit of his personal credit cards.
•  On 9th June 2020 a payment of £9,573.84 was paid in settlement of a debt pertaining to a personally guaranteed loan relating to a separate legal entity.
•  On 12th June 2020 a payment of £592.57 was paid out of the company bank account, for the benefit of his personal credit card
•  During July 2020 the trading premises were vacated, and a review of the company bank account shows no trading activity after 2nd July 2020.
•  On 1st March 2021, The Insolvent Company was placed into Liquidation.
•  At Liquidation liabilities totalled £158,313.27 of which £50,000.00 is due to the financial organisation which provided the BBL and £87,853.67 due to HMRC.
•  HMRC have subsequently submitted a claim in the amount of £99,711.10 of which £83,332.77 relates to unpaid VAT.
•  The Liquidator has identified an outstanding Directors Loan due by him in the amount of £22,346.33.
• The Director failed to comply with his statutory duties as Director of The Insolvent Company (The Insolvent Company) to ensure that the company made timely payments as and when due to HM Revenue & Customs (HMRC) in relation to Value Added Tax (VAT) from 7th May 2017 to the cessation of trade. He caused The Insolvent Company to trade to the detriment of HMRC resulting in a liability of £70,388.77, in that:
•  The Insolvent Company registered for VAT by way of a VAT1 application received by HMRC 1st May 2015.
•  The Insolvent Company to and including VAT quarter 12/16 all returns were submitted by The Insolvent Company and payments were up to date.
•  For VAT quarter 03/17 The Insolvent Company submitted a return totalling £8,218.20. A surcharge was added in the amount of £410.91. HMRC allocated three payments against this quarter in the combined amount of £4,864.30 leaving a balance payable of £3,764.81. At the date of Liquidation this amount remained unpaid.
•  For VAT quarter 06/17 The Insolvent Company submitted a return totalling £8,866.90. HMRC allocated one payment against this quarter in the amount of £5,500.00 leaving a balance payable of £3,366.90. At the date of Liquidation this amount remained unpaid.
•  For VAT quarters 09/17 to 06/19 returns submitted by The Insolvent Company totalling £55,883.62 with applied surcharges totalling £7,373.44. At the date of Liquidation this amount remained unpaid.
•  For VAT quarters 03/20 to 12/20 assessments were raised by HMRC totalling £12,944.00. At the date of Liquidation this amount remained unpaid.
•  The last payment received by HMRC was in the amount of £750.00 on 23rd February 2018 which was allocated against outstanding liability for quarter 03/17.
•  Accounts to 30th June 2017 disclose total HMRC liabilities of £38,455, trade creditors of £21,200 and other creditors totalling £33,526.

 At Liquidation liabilities were £50,000.00 due to the financial organisation which provided the BBL, other creditors of £8,014 and £99,711.10 to HMRC of which £83,332.77 relates to unpaid VAT.

Case 59 – Director Disqualification for trading to the detriment of HMRC and creditors, among other offences

Director Disqualified for 5 years by a director signed undertaking.

The Banned Director caused The Liquidated Company (LC) to fail to maintain or preserve adequate accounting records for LC or, alternatively, has failed to deliver up such records as were maintained to the liquidator. As a result of this, it has not been possible for the liquidator to verify either LC’ asset or liability position or confirm its trading activity, in that:

• LC was incorporated at Companies House on 19 December 2005
• The company operated as a black cab body repair shop
• Company accounts for the years ending 31 December 2019, 31 December 2018 and 31 December 2017 have identical balance sheets and the director has advised that they were incorrect.
• A footnote in the Company accounts for the years ending 31 December 2019 and 31 December 2018 states, Guarantees. These accounts are as 2017, due to the absense of records from the directors.
• The company bank account shows outgoings of at least £224,870 that cannot be accounted for.
• It is not possible to establish LC’ true income, how it was spent and whether it was expended for legitimate trading purposes of the company.

At liquidation LC had liabilities totalling £204,354 which comprised of Deficiency Brought Down – £21,000, Employees (Holiday Pay) – £1,864, Employees (PIL/Redundancy) – £18,340, HMRC (Corporation Tax) – £2,000, HMRC (PAYE/VAT) – £12,915, Natwest (BBL) – £50,000, The Banned Director – £20,000, Tower Hamlets Council – £31,656, Trade Creditors – £46,579

ase 60 – Director Disqualification for failing to pay due VAT, among other offences

Director Disqualified for 5 years by Order of the Court.

Between 07 June 2014 and 31 May 2019 the disqualified director caused The Liquidated Company (LC) to breach its statutory obligations as regards to Value Added Tax (VAT) and Corporation Tax (CT) by failing to file the requisite returns and make payments, when due. Further, from 01 May 2016 to the date of Liquidation he caused LC to trade to the detriment of HM Revenue & Customs (HMRC) whilst withdrawing funds for the benefit of himself. In that:

VAT

•  LC submitted 15 VAT returns between 30 April 2014 and 32 October 2017 declaring VAT due of £67,567. No payment was made in relation to these VAT liabilities.
•  The VAT return for the month ending 30 April 2014 was due for payment on 07 June 2014.
•  LC failed to submit any further VAT returns.
•  HMRC raised 6 assessments between 31 January 2018 and 30 April 2019 where it determined that VAT of £8,636 was due. The VAT due remains unpaid.
•  HMRC has submitted a claim in the liquidation in the sum of £85,148 in respect of outstanding VAT (including surcharges).

Corporation Tax

• TM filed a CT return for the period ended 30 April 2015 resulting in a total CT liability of £23,984, due for payment by 01 February 2016. LC made a payment of £3,510 resulting in an outstanding balance of£20,474 (excluding interest or surcharges) on Liquidation for this period.
•  LC filed a further 3 Corporation Tax returns for the periods ended 30 April 2016, 30 April 2017 and 30 April 2018 resulting in total CT liabilities of £45,067 (excluding interest or surcharges and or penalties). No payments were made in relation to this and the CT liability remained outstanding at Liquidation.
• HMRC has submitted a claim in the Liquidation in the sum of £65,540 (excluding interest) in respect of Corporation Tax.

Comparative Treatment of HMRC

•  Bank statements show that between 01 May 2016, (the day after the last full accounts, to 31 May 2019, LC received income totalling £237,221, during which time payments totalling £229,262 were made to him. Only £7,592 was paid to HMRC.
•  Abbreviated Unaudited Accounts filed at Companies House for the year ending 30 April 2016 record that he owed LC £96,493 via the Director’s Loan Account (DLA). Unaudited Statutory Accounts filed at Companies House for the period ending 30 April 2017 and 30 April 2018 do not record a DLA. The bank statements for the period 01 May 2016 to 31 May 2019 do not show any repayments of the DLA. He has not repaid or made any proposals to repay the DLA, which remained outstanding at Liquidation.

 At Liquidation, LC had liabilities totalling at least £155,513 of which HMRC is owed a total of £155,003

Case 61 – Director Disqualification for failing to pay PAYE and NI, among other offences

Director Disqualified for 3 years by Order of the Court.

The Banned Director caused or allowed The Insolvent Company Limited to trade to the detriment of HMRC from at least 22 September 2017 in respect of PAYE/NIC totalling £244,444.75 in that:

PAYE/NIC

•  For the year 2017/2018 The Insolvent Company submitted returns showing a liability totalling £123,512.29. An employment allowance of £3,000.00 was applied. Payments were received totalling £32,152.32. The remaining liability owing was £91,359.97.
•  For the year 2018/2019 The Insolvent Company submitted returns showing a liability totalling £139,767.13. An employment allowance of £3,000.00 was applied. There were no payments made towards this liability leaving a liability owed of £136,767.13.
•  For the year 2019/2020 The Insolvent Company submitted returns for April and May 2019 showing a liability totalling £20,220.05. An employment allowance of £3,000.00 was applied. There was one payment made of £902.40 made on 5 June 2019 which was the last payment made towards PAYE/NIC, leaving a liability owing of £16,317.65.

Comparative Treatment

•  At cessation of trade HMRC was The Insolvent Company’s largest creditor with debts totalling £244,444.75.
•  Other creditors debt totalled £2,100.00 for Trade and Expense and £5,790.00 for redundancy and £40,000.00 for directors’ loan account.
•  According to the company’s bank statements, between 22 September 2017 to 29 April 2019 payments were received into the bank account totalling £663,471.55.
•  The IP’s bank analysis shows the monies paid to individuals totalling £140,239.12 of which £34,792.82 was paid to him and the remaining £105,446.30 was paid to other individuals.
•  £20,290.00 cash withdrawn from an ATM.

 £28,269.31 was paid to HMRC  of which £15,006.00 in total was paid towards VAT the last payment being £1,000.00 made on 15 February 2019 and £11,763.31 in total was paid towards PAYE the last payment being £688.55 made on 23 March 2018.

Case 62- Director Disqualification for unfair treatment of the crown, among other offences

Director Disqualified for 10 years by a director signed undertaking.

The Banned Director caused The Insolvent Company to trade to the detriment of HM Revenue & Customs (HMRC) in respect of PAYE/NIC liability from at least 22 April 2020 incurring a tax liability of £173,067 & in respect of VAT liability from at least 07 June 2020 incurring a tax liability of £131,869 including surcharges.

PAYE/NIC /CIS

• HMRC records show that the company had incurred a PAYE/NIC/CIS tax liability for 2019/20, 2020/21 and 2021/22.
• From 22 April 2020 until 19 August 2021 (the date of liquidation) The Insolvent Company incurred a PAYE/NIC/CIS liability of £173,067 against which it made one payment totalling £10,000 in June 2021

VAT

• HMRC records show the company filed 5 VAT returns for the quarters ended April 2020 July 2020, October 2020, January 2021 & April 2021. For the quarter ended July 2021 in lieu of a VAT return being filed post liquidation HMRC issued an assessment in August 2021 which is ignored for the purposes of this allegation.
• For the period from 7 June 2020 until 19 August 2021 (the date of liquidation) The Insolvent Company incurred a Value Added Tax debt of £131,869.52 (£129,567.73 excluding surcharges) against which it made only two payments totalling £5,470 in April/May 2021.

HMRC’s differential treatment

• From 22 April 2020 until 19 August 2021 (the date of liquidation), HMRC received differential treatment when compared to other parties;

Bank

• Bank analysis from 22nd April 2020 until liquidation showed £1,300,812 had been paid out of which;
• The Director personally received banking transfers of £181,276
• £48,569 was withdrawn in cash
• A connected party to The Director received £27,995
• By comparison, HMRC received £15,470

Annual Accounts

Accounts for the year end 31 Dec 2109 show tax liabilities of £12,684 Following liquidation HMRC is shown as being the majority creditors, inclusive of all tax liabilities, HMRC have submitted a claim of £308,565 in the liquidation of The Insolvent Company. Others creditors are owed £52,500.

Case 63- Director Disqualification for multiple breaches of HMRC obligations

Director Disqualified for 10 years by a director signed undertaking.

The Director Disqualified caused The Insolvent Company to trade to the detriment of HM Revenue & Customs (HMRC) from August 2017 in respect of Value Added Tax (VAT) December 2018 in respect of Corporation Tax (CT) and April 2019 in respect of RTI PAYE Tax and NIC (PAYE/NIC) resulting in a loss of £35,360 in that:

VAT:

• In the absence of the company submitting its VAT returns for quarters 10.16 and 01.17 HMRC issued assessments on 16 December 2016 and 17 March 2017 respectively, totalling £2,961. Between 17 March 2017 and 22 August 2017 the company made 3 payments totalling £2,864 leaving a balance of £97 outstanding in respect of quarter 01.17.
• Between 03 August 2018 and 09 August 2018 the company submitted 4 VAT returns for quarters 10.16 to 04.18 which increased the VAT liability from £97 to £10,521.
• On the 10 August 2018 HMRC granted the company a time to pay arrangement to allow the company to pay the VAT arrears to 04.18 over 12 monthly instalments. The company failed to honour the agreement as a result of The Banned Director failing to ensure the company made any payments under the terms of the arrangement.
• Under the terms of the arrangement agreed on 10 August 2018 the company was required to submit and pay future VAT returns as and when due. Between 10 September 2018 and 08 June 2020 the company failed to submit VAT returns for quarters 07.18 to 04.20 causing HMRC to issue assessments totalling £12,319, which the company failed to pay. As a result the VAT liability increased to £22,840 which remained wholly unpaid when the company was placed into liquidation.

Corporation Tax:

• On 30 November 2018 HMRC received a return from the company declaring a Corporation Tax liability of £3,012 for the year ending 28 February 2018. Notwithstanding the liability was due to be paid by 01 December 2018 The Director failed to ensure the company complied. As a result HMRC added interest of £104 which increased the outstanding Corporation Tax liability to £3,116.
• On 09 June 2020 HMRC received a late return from the company declaring a Corporation Tax liability of £2,681 for the year ending 28 February 2019. Notwithstanding the liability was payable on submission The Banned Director failed to ensure the company complied. As a result HMRC added a penalty of £200 which increased the Corporation Tax liability to £2,881.
• In the absence of the company failing to submit its CT return for the year ending 28 February 2020 HMRC applied a penalty of £200 which the company failed to pay. As a result the unpaid Corporation Tax liability at liquidation totalled £6,197.

PAYE/NIC:

• During tax year 2019/2020 the company declared a PAYE liability of £8,231 up to April 2020 against which HMRC granted an Employers Credit of £2,710. Notwithstanding, the balance of £5,521 ought to have been paid, at the latest, by 19 April 2020 The Director failed to ensure the company made a single payment.
• During tax year 2020/2021 the company declared a PAYE liability of £950 up to August 2020 against which HMRC granted an Employers Credit of £148. Notwithstanding the remaining balance of £802 ought to have been paid, at the latest, by 19 September 2020 The Banned Director failed to ensure the company complied. As a result the PAYE liability at liquidation totalled £6,323

COMPARATIVE TREATEMENT:

• During the company’s financial year ending 28 February 2018 the company made 3 payments to HMRC in respect of VAT totalling £2,961. In the following financial year to 28 February 2019 no payments were made to HMRC.

An analysis of the company bank account between 01 March 2019 and 25 September 2020 reveals that from credits into the bank account totalling £95,597 between 01 March 2019 and 04 September 2020 payments totalling £95,590 were made between 04 March 2019 and 25 September 2020 of which trade and expense creditors, who were paid in full, received £39,413 and The Director Disqualified received £56,177. In comparison HMRC received no payments.