Director disqualification for two offences

Case 1 – Director Disqualification – failure to maintain or deliver up accounting records and HMRC non payment

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

The Director Disqualified failed to ensure that The Insolvent Company maintained or preserved all accounting and administrative records or alternatively has failed to deliver up all such that did exist.

Records delivered up

• The Insolvent Company has delivered up records to the liquidator which are incomplete and they do not contain, amongst other omissions, a cash book or other record of cash transactions.
• A firm of business advisors, who assisted him in dealing with arrangements to place The Insolvent Company into liquidation, has stated that he disposed of some of The Insolvent Company’s records prior to the business advisors’ involvement and prior to liquidation.
• He has not responded to the either liquidator of Insolvency Service requests for information and the provision of any missing documentation

Consequences

As a result of the incomplete records delivered up and assertedly disposed of by him, it is not possible to ascertain:

• The full and true amounts due to HMRC for VAT, PAYE/NIC or Corporation Tax resulting from the company trading
• The reasons for, and ultimate recipients of, cash withdrawals totalling £492,362.20 during its entire active trading history (8 January 2018 to 20 November 2019)
• The reasons for, and ultimate recipients of, net payments to the former director totalling £64,692.20, including the categorising of such for taxation purposes. These net payments include a payment of £19,850 on 10 September 2018 made in respect of a motor vehicle that is not evidenced as being the property of The Insolvent Company
• The true role and of the former director and who whether any other person was in control of the company or acting on an equal footing with him
• The full and true extent of any Director Loan Account outstanding to or from him
• Whether all assets have been disclosed
• The dates between which the company traded
• The accuracy of the statement of assets and liabilities

 The case of failure

He caused or allowed The Insolvent Company to file incorrect dormant accounts for the period ending 31 July 2018 (the July 2018 accounts). In that:

• The Insolvent Company filed dormant accounts for the period ending 31 July 2018 when The Insolvent Company’s bank statements show it was actively trading.
• He signed the July 2018 accounts on 10 April 2019 which were filed at Companies House on 07 May 2019.
• The Insolvent Company’s bank account was opened on 11 December 2017 and the first transaction was on 8 January 2018.
• Between 8 January 2018 and 31 July 2018 (being the end date of the July 2018 accounts), The Insolvent Company’s bank account received 66 payments which totalled £512,858.60 and made 368 payments which totalled £512,853.51.

The Insolvent Company has failed to file accounts for any later period of trade or any amending accounts.

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) when due. As a result, HMRC’s liabilities estimated in the sum of £97,068.04 in respect of VAT and £15,835.74 in respect of PAYE remained overdue and outstanding on liquidation and The Insolvent Company traded to the detriment of HMRC in respect of VAT from 7 March 2018 and in respect of PAYE/NIC from at least 22 March 2019 to liquidation on 13 July 2020. In that

VAT

• The Insolvent Company was incorporated on 11 July 2017 and commenced trading in late December 2017/early January 2018.
• The Insolvent Company registered for VAT on 11 January 2018 with a VAT registration date of 01 December 2017.
• The Insolvent Company did not file any VAT returns for any period
• The Insolvent Company contacted HMRC on 30 October 2018, to advise that the VAT returns for the periods 01/18, 04/18 and 07/18 would be filed and that payment of the outstanding liabilities would be made. No returns were filed and the outstanding liabilities were not paid.
• On 13 November 2019, HMRC notified The Insolvent Company that input tax had been claimed on invoices where evidence had not been provided that a taxable supply had taken place. As a consequence HMRC raised corrected assessments the periods 01/18, 04/18 and 07/18 for a total of £81,504 to amend the original assessments which HMRC had raised.
• The Insolvent Company ceased to trade in November 2019.
• The Insolvent Company made four payments to HMRC in relation to VAT totalling £2,670 between 16 April 2018 and 12 December 2018 which , at that point, cleared the amounts due as per assessment raised in lieu of returns and full and accurate information provided by the company

PAYE

• The last monetary payment made by The Insolvent Company in relation to the monthly returns was on 15 January 2019
• HMRC’s total PAYE claim in the liquidation is £15,835.74.

Comparative treatment

• The Insolvent Company has not filed any trading accounts for any period.
• The Insolvent Company’s bank account was opened on 11 December 2017. During The Insolvent Company’s apparent period of trade (8 January 2018 to 20 November 2019 being the first and last transactions on the bank account), £1,431,840.25 was received and £1,431,840.25 expended .
• HMRC records payments of a total of £2,670 were made in respect of VAT and £1,408.79 in respect of PAYE/NIC, with none after 15 January 2019
• HMRC is the largest creditor in the liquidation with a total claim of £113,704.20.

Case 2 – Director Disqualification – failure to comply with statutory HMRC duties

Director Disqualified for 7 years by Order of the Court.

The Disqualified Director failed to ensure The Liquidated Company complied with its statutory obligations to register for Value Added Tax (VAT) when The Liquidated Company exceeded the VAT threshold, once registered failed to ensure that The Liquidated Company submitted accurate VAT returns and subsequently requested The Liquidated Company to be deregistered for VAT when The Liquidated Company was still making VAT’able supplies. The Banned Director also failed to ensure The Liquidated Company declared its true Corporation Tax (CT) on returns submitted. As a result, at liquidation, HMRC were owed £247,770 in respect of underdeclared VAT (inclusive of penalties) and £367,745 in respect of underdeclared Corporation Tax (inclusive of penalties).

VAT

• The Liquidated Company registered for VAT effective on 01 November 2014.
• The Liquidated Company submitted VAT Returns for the VAT quarters ended from 01/15 to 10/17 disclosing liabilities totalling £22,563, these were paid in full;
• Following an application made on behalf of The Liquidated Company to cancel its VAT number, on 01 August 2017 HMRC cancelled The Liquidated Company VAT registration;
• On 04 October 2018, The Banned Director signed a Contractual Disclosure Facility Undertaking with HMRC, admitting that he had deliberately under declared sales/ VAT in respect of The Liquidated Company;
• On 14 May 2019, following HMRC’s examination of data provided by a third party, HMRC identified that The Liquidated Company had failed to submit returns when the VAT threshold was met on 01 February 2014, prior to its actual VAT registration on 01 November 2014, and had made VAT’able supplies between 01 November 2017 and 30 April 2018, after its VAT registration was cancelled;
• On 14 May 2019, HMRC also identified that The Liquidated Company had not declared the correct amount of VAT for quarter ended from 04/14 to 10/17;
• As a result HMRC issued a Notice of Assessment totalling £165,211, which remains unpaid at the date of liquidation;
• On 17 June 2019, HMRC issued a Notice of Penalty Assessment for VAT for the sum of £82,559;
• HMRC’s claim in the liquidation in respect of VAT is £247,770;

Corporation Tax

•  The Liquidated Company submitted Corporation Tax returns for accounting year ended 29 April 2014 and 30 April 2015 with total liabilities of £474 against which full payment was made;
• On 04 October 2018, The Banned Director signed a Contractual Disclosure Facility Undertaking admitting that he had deliberately under-declared sales in respect of The Liquidated Company;
• On 24 May 2019 HMRC raised Assessments for additional corporation tax liabilities for accounting years 2013/2014, 2014/2015, 2015/2016, 2016/2017 and 2017/2018 totalling liabilities of £290,105 (includes filing penalties of £900 plus interest of £18,726);
• On 12 June 2019, a Notice of penalty assessment was issued for failure to notify and the delivery of inaccurate returns for the sum of £77,640;
• HMRC’s claim in the liquidation in respect of corporation tax is £367,745.”

Case 3 – Director disqualification for various tax offences

Director Disqualified for 4 years by Court Order.

The Director failed to ensure that the liquidated company complied with its statutory obligations to HM Revenue & Customs (‘HMRC’) by not providing accurate information regarding the liquidated company’s income in VAT and Corporation Tax (‘CT’) returns. HMRC raised assessments for additional CT due for the accounting periods 30 November 2014 and 2016 and VAT for the quarters November 2014 to November 2017, totalling £49,366. In that:

• HMRC identified that the liquidated company was declaring very few cash sales and in October 2017 a cash test purchase was made;
• Following this, HMRC visited PTR’s premises to undertake a cashing up exercise and then collected its records for review;
• The review identified that the test cash purchase and other cash purchases observed at the time, were not included in the records;
• It was concluded that the records were therefore incomplete and the submitted VAT and CT returns were inaccurate;
• Further cash purchases were found to be absent from the records following a subsequent visit by HMRC;
• HMRC estimated that income totalling £129,479 had not been declared in the accounts for the years ended 30 November 2014 to 2017, which it considered to be additional director drawings;
• Assessments were raised for CT for the accounting periods ended 30 November 2014 to 2016, although for procedural reasons that for 2015 was later cancelled;
• CT due for 2014 and 2016 was assessed at £28,685;
• VAT for the quarters November 2014 to November 2017 was assessed as £20,681

The assessments raised can only be an estimate as full cash records have not been produced to HMRC.

Case 4 – Director disqualification for misuse of funds and bounce back loan abuse and failure to preserve accounting records

Director Disqualified for 4 years by Court Order.

The Company Director caused the Insolvent Company to misuse funds totalling at least £23,246 obtained via the Bounce Back Loan scheme (hereinafter referred to as BBL) in that:

•  On 11 May 2020 the Insolvent Company received a £50,000 BBL, prior to which CD had the Insolvent Company bank balance of £26,754.68;
• At the point of application for the BBL, he signed a declaration to use the BBL wholly for business purposes and not personal purposes;
• Between receipt of the BBL and 20 May 2020 the Insolvent Company bank account received credits totalling £6,162.53, and made payments totalling £8,852.15;
• On 20 May 2020 a payment totalling £50,000 was made from the Insolvent Company bank account to an investment account registered in the name of himself, which could not have been made without funds obtained through the BBL scheme;
• On 21 May 2020 he used his investment account to purchase shares in a global energy company to the value of £50,050;
• He failed to disclose these shares as an asset to the Liquidator;
• No repayment towards the BBL has been made and the company entered liquidation on 02 December 2021 owing £158,902.92 to creditors.

He has failed to maintain, preserve and/or in the alternative deliver up adequate accounting records for The Insolvent Company for any period between 13 March 2018 (the date of incorporation) and 02 December 2021 (the date of liquidation), as a consequence it is not possible to:

• Verify, in the absence of any cash deposits to IC bank account, that cash income has been recorded and accounted for, and the value of any cash income;
• Determine how cash withdrawals from IC bank account between 12 April 2018 and 20 October 2021 totalling £50,840.62 were used;
• Verify, In the absence of any PAYE RTI submissions to HMRC, whether all appropriate taxes and national insurance contributions have been paid on wage payments to third parties totalling £75,738.66 and payments to him totalling £94,093.10 between 12 April and 20 October 2021;
• Determine whether IC the insolvent business was required to register and account for VAT, and the value of any VAT that should have been reported and paid to HMRC;
• Verify creditors’ claims in IC liquidation, including £100,000 purported to be owed to him.”

Case 5 – Director disqualification for HMRC offences

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

The Director Disqualified caused The Insolvent Company to trade to the detriment of HM Revenue and Customs (HMRC) between April 2020 and 30 September 2021 in respect of PAYE/NIC and between 06 July 2020 and 30 September 2021 in respect of VAT in that:

PAYE/NIC

• For the year ending 05 April 2020 The Insolvent Company incurred PAYE/NIC liabilities totalling £27,459 and made payments of £21,280 (including a £3,000 credit) leaving a balance outstanding at liquidation of £6,178.
• For the year ending 05 April 2021 The Insolvent Company incurred PAYE/NIC of £30,547 and made payments of £7,206 (including a £4,000 credit) leaving a balance of £23,342
• For the period up to liquidation The Insolvent Company incurred PAYE/NIC of £26,429 against which no payments were made and received credits of £4,000 leaving a balance of £22,429 at liquidation.
• The amount unpaid amount outstanding at liquidation is £51,950

VAT

• The Insolvent Company registered for VAT with effect from 01 January 2016.
• On 06 July 2020 a VAT return of £12,215 was due for the period 05/20
• A further four quarterly VAT returns were made creating a total VAT liability of £75,680
• Surcharges of £6,215 have been incurred.
• A VAT payment of £20,301 was due for period 02/20, having been deferred under Corona Virus rules until 31/3/21 remains unpaid.
• No payments have been made relating to these VAT liabilities. A total, including surcharges, of £114,412 remains unpaid.

Detrimental treatment

• The year-end accounts at 31 May 2020 showed The Insolvent Company owed £67,902 to HMRC and £2,855 to trade creditors. At liquidation the amounts owed to HMRC and trade creditors had increased by £98,661 and £5,885 respectively.
• VAT returns filed by The Insolvent Company covering the period from 1 March 2020 to 31 May 2021 show turnover totalling £536,683. During the same period payments totalling £7,206 were made to HMRC. During the period from 31 May 2020 to liquidation on 30 September 2021 The Director Disqualified increased the loan that he owed to The Insolvent Company by £182,247 to £277,648.

Case 6 – Director disqualification for misappropriation of tax money

Director Disqualified for 5 years by a director signed undertaking.

Between 01 August 2010 to 31 December 2016, The Banned Director caused The Insolvent Company to misappropriate company funds to the detriment of Her Majesty’s Revenue and Customs (HMRC) resulting in losses to HMRC of £940,930.

• On 22 August 2018 HMRC opened an enquiry into The Insolvent Company’s Corporation Tax return for the year ending 31 December 2016.
• On 12 March 2019, via an agent, he submitted a disclosure to HMRC admitting that between 01 August 2010 and 31 December 2016 he had deliberately misappropriated company funds of approximately £2,319,442 by withdrawing cash for his own benefit which was recorded as fish purchases in The Insolvent Company’s financial statements, thereby reducing The Insolvent Company’s Corporation Tax liability.
• On 29 April 2021 HMRC raised Corporation Tax assessments totalling £422,503 and Section 455 Tax assessments totalling £464,551 against The Insolvent Company for the accounting periods ended 31 December 2011 to 31 December 2016 inclusive.
• On 09 August 2021, HMRC raised further Corporation Tax assessments of £23,960 and Section 455 Tax assessments of £29,916 for the accounting periods ended 31 December 2011 to 31 December 2016 inclusive. A penalty of £458,704 was also raised against The Insolvent Company.

 The Insolvent Company above penalty and assessments remain outstanding at liquidation.

Case 7 – Director disqualification for not preserving or delivering up accounting records

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

The Company Director failed to ensure that The Insolvent Company Limited maintained and preserved adequate accounting records for the period from 1 April 2020 to cessation of trading on 28 April 2021, or, in the alternative, failed to deliver up such records to the liquidator, with the consequence that:

•  The Insolvent Company’s accounts for the period 5 March 2019 to 31 March 2020 record that, as of 31 March 2020, The Insolvent Company had tangible assets of £3,250, debtors of £8,250, and cash at bank of £17,151. In the absence of adequate records, it has not been possible to determine what happened to these assets.

• The Insolvent Company’s bank statements for the period from 31 March 2020 to 04 June 2021 record total debits of £281,996.90, including net payments of £74,322.71 to him, and £53,681.50 of cash withdrawals. In the absence of adequate records, it has not been possible to determine whether all the payments made from The Insolvent Company’s bank account were for legitimate business purposes.

•  The Insolvent Company’s bank statements for the period from 31 March 2020 to 04 June 2021 record total credits of £279,710.07, including a £50,000 bounce back loan. The Insolvent Company’s Statement of affairs records that it ceased trading on 28 April 2021. However, the last trading income recorded on its bank statements was received on 19 November 2020. The Insolvent Company’s bank statements do not record any cash deposits. In the absence of adequate records, it has not been possible to determine whether all The Insolvent Company’s income is recorded in the bank statements, and whether the bounce back loan funds were all used for the benefit of The Insolvent Company’s business.
• The Insolvent Company did not register for VAT or PAYE, and its bank statements do not record any payments to HMRC. The Insolvent Company’s accounts for the period 5 March 2019 to 31 March 2020 record wages and salaries of £48,215 and employer’s NI of £2,094. By the end of December 2019, The Insolvent Company’s bank account records turnover of £100,386.54. In the absence of adequate records, it is not possible to establish the date by which The Insolvent Company should have registered with HMRC for VAT and PAYE or the liability to HMRC for those taxes.
• The Insolvent Company’s statement of affairs, signed by him on 17 August 2021, records that The Insolvent Company had liabilities totalling £105,059.53 and no assets. The liabilities comprised a £50,000 bounce back loan, £45,836 VAT, £1,723.53 of trade creditors, and £7,500 claimed by him. Since The Insolvent Company entered liquidation, the liquidator has been able to make recoveries of £2,093.03. In the absence of adequate accounting records, it has not been possible to determine whether this is a full and accurate account of The Insolvent Company’s assets and liabilities. It has also not been possible to determine the true balance of his director’s loan account.

Case 7 – Director disqualification for not preserving or delivering up accounting records

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

The Director failed to ensure that in the period after that covered by its last filed accounts, which were made up to 31 May 2018, to its Liquidation on 19 February 2020, The Insolvent Company maintained and/or preserved adequate accounting records, or in the alternative, failed to ensure that such records as were maintained and/or preserved were delivered up to the Liquidator following liquidation. As a result, it has not been possible to:

• Deduce whether receipts totalling £3,902,554 listed on The Insolvent Company’s bank statements for the period 01 June 2018 to 19 February 2020 constituted its total income for that period.
• Deduce the full extent to which payments totalling £3,902,901 listed on The Insolvent Company’s bank statements for the period from 01 June 2018 to 19 February 2020 relate to legitimate trading expenditure.
• Verify the legitimacy of the outstanding liability of £7,300,000 to two connected companies listed on The Insolvent Company’s Statement of Affairs and why this increased from the £4,317,427 shown as being owed to these two companies in the filed accounts for the year ended 31 May 2018.

Establish the level of The Insolvent Company’s assets and what has happened to them prior to the Liquidation, in that:

• The filed accounts for the year ended 31 May 2018 list tangible assets of £224,273 and current assets of £4,135,296 as at 31 May 2018.
• The tangible assets consist of land and buildings with a stated net book value of £163,000 and plant and machinery with a stated net book value of £61,273.
• The current assets include stocks of £3,861,573, debtors of £269,647 and cash at bank and in hand of £4,076.
• The only asset listed on The Insolvent Company’s Statement of Affairs was an overdrawn Director’s Loan Account for £151,000.

No documents relating to the tangible and current assets have been provided to the Liquidator by The Banned Director and no explanation has been provided by her as to their current whereabouts.

Without further records it is not possible to verify the true value of assets available for the purpose of recovery.

Case 8 – Director disqualification for Bounce back loan offences

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

The Director Disqualified caused The Insolvent Company (IC) to breach the terms and conditions of the Bounce Back Loan (BBL) scheme by applying for a BBL of £50,000 on 15 May 2020 which it wasn’t entitled to, in that:

• Terms and conditions of the BBL scheme included that the business is engaged in trading or commercial activity in the UK at the date of the application, was carrying on business on 1 March 2020 and has been adversely affected by coronavirus (COVID-19).
• According to banking activity IC had ceased to trade by 06 February 2020 at the latest.
• The local authority business rates section advise that IC ceased to be liable for business rates on the trading premises after 31 July 2019, due to change of occupancy.
• A lease for the trading address dated 25 July 2019 was transferred from IC to a connected company on 25 July 2019.

At the date of liquidation on 04 October 2021, a total of £69,095 was owed to creditors. £48,436 was owed to the bank and £20,615 was owed to an employee following an employment tribunal outcome.

Case 9 – Director disqualification for various tax offences

Director Disqualified for 2 years by a director signed undertaking.

The Director Disqualified failed to ensure that The Insolvent Company (The Insolvent Company) The Insolvent Company (The Insolvent Company) complied with its statutory duties and make payments to HM Revenue and Customs (HMRC) when due and therefore caused or allowed The Insolvent Company to trade to the detriment of HMRC in respect of VAT from 07 November 2017 to liquidation on 20 July 2020. As a result, HMRC’s VAT liabilities estimated in the sum of £193,683.75 remained overdue and outstanding on liquidation. In that:

VAT

• Her co-director’s existing sole trader business was incorporated on 26 February 2010 as The Insolvent Company. The Insolvent Company commenced trading on incorporation using the existing VAT registration number.
• A Time to Pay arrangement (TTP) was made with HMRC on 22 March 2017. Whilst the TTP was conditional on returns being filed on time and payments made in full, payments towards The Insolvent Company’s VAT liabilities were not maintained and payments for the periods 06/17, 09/17 and 12/17 were not paid in full.
• HMRC wrote to The Insolvent Company on 16 March 2018 to confirm the TTP had failed and the outstanding VAT was £71,368.01.
• Following a review of The Insolvent Company’s sale and purchase invoices, HMRC wrote to The Insolvent Company on 07 June 2019 to notify of an adjustment to the VAT for the period 09/18.
• HMRC presented a winding up petition on 3 February 2020 which included the outstanding VAT liability of £154,945.02 for the periods 06/17, 09/17, 03/18, 06/18, 09/18, 12/18 and 06/19 with surcharges of £8,788.49 for the periods 06/18, 12/18 and 03/19.
• The Insolvent Company first made contact with the Liquidator on 5 February 2020. A CVA proposal was issued to creditors on 28 February 2020. The CVA proposal was approved by creditors, but a decision was taken by the directors to withdraw the CVA proposal due to the impact of coronavirus and The Insolvent Company was placed with liquidation on 20 July 2020.
• The Insolvent Company’s VAT liability for the period 06/17 was almost discharged in full. Outstanding Liability information provided by HMRC confirms that The Insolvent Company did not maintain payments towards its VAT liabilities from the period 09/17 onwards (which was due for payment on 7 November 2017).

Comparative treatment

• HMRC is the largest creditor in the liquidation with the VAT claim of £193,683.75 (Tax of £184,895.26 and surcharges of £8,788.49). HMRC’s total claim is £203,641.14.
• The estimated deficiency in the Statement of Affairs signed on 13 July 2020 was £359,969, of which Trade and Expense creditors were £42,063.77 and Employee Claims were £43,483.27.
• The bank and a finance company were creditors for a total of £72,064.19. Personal guarantees have been given by the directors in respect of the bank and the finance company.
• As at 27 March 2020, the outstanding Directors Loan Account (DLA) was £44,037.26. On 31 March 2020, the DLA balance was reduced by the declaration of dividend of £40,000 for the accounting period ended 31 March 2020. The £40,000 dividend was not paid out of the bank account to the directors, but instead allocated to the overdrawn DLA. In the absence of the dividend then the outstanding DLA would have been £44,017.26 at liquidation.
• During the period from 02 July 2018 to liquidation (on 20 July 2020), The Insolvent Company’s bank account received the total sum of £2,426,180.02 and paid out the total sum of £2,445,724.28; HMRC received £72,563.27 of which £48,305.61 is identified as being in respect of VAT.
• During the same period, HMRC records show the same amount was received by HMRC in respect of VAT with the last payment being made on 30 January 2020 in the sum of £5,000.

Case 9 – Director disqualification for Bounce back loan offences for 2 companies

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

The Banned Director caused The Liquidated Company (LC) to apply for a Bounce Back Loan (BBL) of £50,000 when he knew, or ought to have known, that LC was only eligible for a loan to a maximum amount of £30,786. In that:

• LC was incorporated at Companies House on 15 March 2019
• The BBL criteria allowed a business to borrow between £2,000 and up to 25% of the company turnover (up to a maximum of a £50,000 loan) for the calendar year 2019 or, where a business was established after 1 January 2019, it is their estimated turnover for the first 12 months of trading
• The Director applied for a BBL of £50,000 on behalf of LC, stating in the loan application that LC’s turnover for 2019 was £250,000.
• An analysis of the income from LC’s three Metro bank account statements from 1 April 2019 to 31 December 2019 shows credits of £92,340 for that period. If this had continued for the whole of the first 12 months of trading the turnover would have been £123,120, allowing a BBL loan of £30,786.
• On 20 July 2020, funds of £50,000 were credited to AWG Comm’s Metro Bank Account No 33171706. On 20 July 2020 £15,000 was paid out to The Director and on 24 July 2020 a further £12,710 was paid out to The Director Disqualified.
• At the date of the Liquidation on 16 September 2021, a total of £115,795 was owed to creditors, of which £50,000 was in respect of the BBL, £6,702 to trade creditors, £58,454 to The Liquidated Company and £10,424 to The Liquidated Company, (The banned director is also the sole director of these last two creditor companies).

The Disqualified Director caused another company (LC2) to apply for a Bounce Back Loan (BBL) of £50,000 when he knew, or ought to have known, that LC2 was only eligible for a loan to a maximum amount of £30,469. In that:

• LC2 was incorporated at Companies House on 19 February 2019
• The BBL criteria allowed a business to borrow between £2,000 and up to 25% of the company turnover (up to a maximum of a £50,000 loan) for the calendar year 2019 or, where a business was established after 1 January 2019, it is their estimated turnover for the first 12 months of trading.
• The Director applied for a BBL of £50,000 on behalf of LC2, stating in the loan application that LC2’s turnover for 2019 was £200,000.
• An analysis of the income from LC2’s four Metro bank account statements from 1 April 2019 to 31 December 2019 shows credits of £91,408 for that period. If this had continued for the whole of the first 12 months of trading the turnover would have been £121,877, allowing a BBL of £30,469.
• On 25 June 2020, funds of £50,000 were credited to AWG Green Waste’s Metro Bank Account No 32560946. Between 25 and 30 June 2020 a total of £50,000 was paid out to The Director personally, in 5 equal payments of £10,000 each.
• At the date of the Liquidation on 16 September 2021, a total of £52,573 was owed to creditors, of which £50,000 was in respect of the BBL and £2,573 to trade creditors.

Case 10 – Director disqualification for tax and VAT offences

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

As a director of The Dissolved Company, The Company Director caused The Dissolved Company to submit inaccurate company returns for Value Added Tax (VAT) which resulted in the company deliberately under-declaring and underpaying VAT, in that:

• On 12 September 2018 he submitted a voluntary disclosure to HMRC on behalf of The Dissolved Company. He stated that the company had been involved in deliberate and fraudulent conduct which had brought about a loss of tax and/or duties.
• On 12 November 2020, HMRC described the disclosed inaccuracy as under-declared cash sales and directors’ personal expenses incorrectly claimed as business expenses for VAT periods ending 11/11 to 08/18. As a result of these inaccuracies:
• On 2 February 2021 VAT assessments were issued by HMRC for the VAT periods ending 11/11 to 08/18 totalling £37,645.00.
• On 5 February 2021 HMRC issued penalty assessments totalling £11,580.20 because of the inaccuracies.
• HMRC consider that the behaviour in submitting inaccurate company VAT returns was deliberate.
• On the 27 April 2022 The Dissolved Company was subject to a winding up order following a petition submitted by HMRC for the sum of £148,221.23.

Case 11 – Director disqualification for Bounce back loan offences and connected companies

Director Disqualified for 7 years by a director signed undertaking.

On 26 May 2020 The Director Disqualified caused The Insolvent Company  to pay £50,000 to a connected company, the same day that a Bounce Back Loan (BBL) of £50,000 had been received. The payment to the connected company breached the conditions of the BBL in that it was not used to provide economic benefit to the business.

• The Insolvent Company was incorporated on 26 April 2019, and he was the sole director from incorporation to liquidation.
• On 26 May 2020 a BBL of £50,000 was credited to The Insolvent Company’s account.
• On 26 May 2020 a payment of £50,000 was made to a connected company.
• The balance in the account would have been insufficient to make the payment to the connected company had the BBL funds not been received.
• No previous payments had been made to the connected company since incorporation, nor were any further payments made.
• The Insolvent Company never received any funds into its bank account from the connected company.
• The Insolvent Company went into liquidation on 30 November 2021 with scheduled liabilities of £50,500.
• The connected company is not a creditor in the proceedings.

Reids 003 Limited

• On 26 May 2020 The Banned Director caused Reids 003 The Insolvent Company to pay £46,000 to a connected company, the same day that a Bounce Back Loan (BBL) of £46,000 had been received. The payment to the connected company breached the conditions of the BBL in that at least £20,000 was not used to provide economic benefit to the business.
• Reids 003 was incorporated on 18 July 2019, and he was the sole director from incorporation to liquidation.
• On 26 May 2020 a BBL of £46,000 was credited to Reids 003 The Insolvent Company.’s account.
• On 26 May 2020 a payment of £46,000 was made to a connected company of which £26,000 is potentially a loan repayment but there is no explanation for the further £20,000.
• The balance in the account would have been insufficient to make the payment to the connected company had the BBL funds not been received.
• No previous payments had been made to the connected company since incorporation (there was one subsequent payment of £3,300 on 29 July 2020).
• £247,640 was received from the connected company between 31/08/2019 and 23/05/2020, of which £26,000 is described as LOAN, £6,000 DXB OFFICE and £215,640 payroll. There was one subsequent receipt for £5,000 on 29/05/2020 also described as payroll.
• Reids 003 The Insolvent Company went into liquidation on 30 November 2021 with scheduled liabilities of £200,500 (£246,500 with the BBL provider included).
• The connected company is not a creditor in the proceedings.

Reids Holdings

On 26 May 2020 The Director Disqualified caused the company to pay £50,000 to a connected company, the same day that a Bounce Back Loan (BBL) of £50,000 had been received. The payment to the connected company breached the conditions of the BBL in that it was not used to provide economic benefit to the business.

• The Insolvent Company was incorporated on 17 June 2019, and he was the sole director from incorporation to liquidation.
• On 26 May 2020 a BBL of £50,000 was credited to Reids Holdings The Insolvent Company.’s account.
• On 26 May 2020 a payment of £50,000 was made to a connected company.
• The balance in the account would have been insufficient to make the payment to the connected company had the BBL funds not been received.
• No previous payments had been made to the connected company since incorporation, nor were any further payments made.
• The company had never received any funds into its bank account from the connected company.
• The company went into liquidation on 30 November 2021 with scheduled liabilities of £50,500.

The connected company is not a creditor in the proceedings.

Case 12 – Director disqualification for Privacy and Electronic Communications Regulations 2003 (PECR) offences

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

In the period from 14 May 2018, at the latest, to 17 December 2018 The Disqualified Director failed to ensure that The Liquidated Company complied with its statutory obligations under The Privacy and Electronic Communications Regulations 2003 (PECR) such that The Liquidated Company was found to have contravened regulations 21 and 23 in that:

• Between 14 May 2018 and 17 December 2018, records held by the Information Commissioners Office (ICO) show that 853,760 direct marketing calls were made by The Liquidated Company to individual subscribers registered with the Telephone Preference Service (TPS)
• Between 14 May 2018 and 17 December 2018, the ICO received 197 complaints from individuals who alleged that they had received unsolicited direct marketing calls in breach of regulation 21 of PECR, as they had been registered with the TPS for at least 28 days and had not provided their consent to the calls. A further 25,318 calls were made to TPS registered individuals after the first notification was received from the ICO on 14 November 2018
• Following its investigation, the ICO was satisfied that The Liquidated Company knew or ought to have known that there was a risk that contravention of regulation 21 would occur for the following reasons:
• The Liquidated Company relied heavily on direct marketing and had no policies or procedures in place to check due diligence on third party data.
• The Liquidated Company was aware of its obligations under PECR from 14 November 2018 when the ICO informed The Liquidated Company about complaints and notification of possible breaches of PECR
• The ICO considered that reasonable steps had not been taken by The Liquidated Company to prevent contravention as The Liquidated Company was registered with ICO and would have been aware of their duties under PECR. The Liquidated Company purchased data but failed to conduct due diligence on the data to ensure that the data had been screened.
• The ICO also found that The Liquidated Company had contravened regulation 24 of PECR in that none of the complainants were able to correctly identify the organisation making the call. The Liquidated Company had registered two trading names of The Liquidated Company of which none of the complainants were advised of either of these as being the caller.
• A Preliminary Enforcement Notice dated 11 June 2019 was sent to The Liquidated Company by the ICO informing the company that a penalty of £160,000 was to be levied against it. No communication was received by LC.
• A Monetary penalty notice was issued to The Liquidated Company by the ICO on 3 July 2019 with a due date for payment on 30 August 2019. The Liquidated Company ceased trading on 25 July 2019 and was placed into a CVL on 03 September 2019. The director advised that the company was not in a position to be able to fund the costs of an appeal against the ICO decision.

Case 13 – Director disqualification for trading to the detriment and HMRC offences

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

The Banned Director failed to ensure that The Insolvent Company complied with its statutory obligations to Her Majesty’s Revenue & Customs (HMRC) to submit accurate returns and make payments when due, and caused AEL to trade to the detriment of HMRC, the majority creditor at liquidation, from at least 07 June 2017 until cessation of trade in August 2020. As a result, HMRC estimated that VAT in the sum of £290,159.86 (including interest and penalties) remained overdue and outstanding as at liquidation. In that:

VAT

• The Insolvent Company was registered for VAT from 01 December 2013.
• The Director has claimed AEL creased trading in August 2020.
• HMRC wrote to The Insolvent Company on 08 December 2019 to confirm that it required information and records to verify the VAT reclaim submitted by The Insolvent Company in respect of period 10/19 in the sum of £14,334.78. HMRC subsequently wrote to The Insolvent Company on 04 February 2020 to confirm that the VAT reclaim was being amended to the lesser sum of £13,356.73.
• HMRC conducted further investigation into The Insolvent Company VAT affairs which established that The Insolvent Company underdeclared VAT due which resulted in additional VAT assessments being raised in the sum of £213,115 in respect of VAT covering the period 01 February 2017 (period 04/17) to 30 September 2020 (final period).
• The assessments were based on HMRC’s calculations of the information it held provided by the marketplace and included sales data provided by eBay in respect of each of The Insolvent Company three eBay trading accounts. . Analysis of this information by HMRC was used to identify under-declared output tax and calculate the level of the additional assessments raised.
• HMRC’s final claim confirms the The Insolvent Company VAT liability in liquidation in the sum of £290,159.86 was comprised of VAT due in respect of returns filed for periods 01/20 and 04/20 in the sum of £542.24, an assessment raised in respect of the final VAT period (covering the period 01 August 2020 to 30 September 2020) in the sum of £178.76 as well as additional officer assessments raised in the total sum of £213,115 as a consequence of under-declarations made by The Insolvent Company in respect of VAT periods 04/17 onwards.
• In addition to these returns and assessments totalling £213,836, HMRC has also raised penalties in the sum of £63,926 and levied interest in the sum of £12,397.86.

Comparative treatment

• HMRC is the majority creditor in the liquidation owed the total sum of £291,943.56 in the liquidation out of total liabilities of £374,177.
• From 07 June 2017 to cessation of trade at 31 August 2020, AEL’s current bank statements show that it received receipts totalling £681,549.19 and expended £741,087.26 of which net payments in the sum of £10,386.88 were received from HMRC in respect of VAT reclaims made during this period.

Case 14 – Director disqualification for trading to the detriment and HMRC offences

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

From at least December 2013 onwards The Disqualified Director failed to ensure that The Liquidated Company (The Liquidated Company) submitted accurate returns to Her Majesty’s Revenue & Customers (HMRC) in respect of Value Added Tax (VAT) and Pay As You Earn (PAYE) resulting in liabilities of £52,399 that remained unpaid at the date of liquidation. In that:

VAT:

• The Liquidated Company was registered for VAT from the 01 January 2013 and submitted returns for periods up to and including June 2019.
• HMRC investigated The Liquidated Company between April and November 2017 and concluded that VAT amounts declared by The Liquidated Company were inaccurate.
• On 09 May 2019 HMRC raised an assessment in respect of underdeclared VAT totalling £7,870 and penalties & interest totalling £3,863 for the quarter ending June 2013 to June 2017.
• The Liquidated Company ceased trading on the 09 September 2018.
• HMRC’s total claim in liquidation is £11,733 in respect of VAT.

PAYE:

• The Liquidated Company registered for PAYE filing nil returns for the years ending April 2013 to April 2018.
• HMRC investigated The Liquidated Company between April and November 2017 and concluded that PAYE returns were inaccurate given the observed staffing levels.
• HMRC raised assessments in respect of PAYE on the 17 April 2019 for period 06 April 2012 to 05 April 2018 totalling £30,432 and issued a penalty of £10,174.

HMRC’s total claim in liquidation in respect of PAYE is £40,606 including penalties & interest.

Case 15 – Director disqualification for BBL & HMRC offences

Director Disqualified for 10 years by a signed undertaking of the director.

On 15 September 2020 The Company Director caused the insolvent company to apply for a government-backed Bounce Back Loan (‘BBL’) of £50,000 for which it was not eligible for and to failed to use its entirety for the economic benefit of the business, In that:

• Under the Bounce Back Loan scheme the applicant must be carrying on business on 01 March 2020 and at the time of the Bounce Back Loan 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.
• The Insolvent Company was incorporated on 13 June 2019.
• The company filed dormant accounts for the year ending 30 June 2020 on 13 June 2021,
• The Insolvent Company’s bank account was opened on 19 June 2020 and activity started from 7 August 2020.
• There is no evidence of The Insolvent Company trading or having entered into any transactions prior to the opening of this bank company. The Insolvent Company was therefore not eligible to apply for a Bounce Back Loan
• On 25 August 2020 he applied for a Bounce Back Loan of £50,000, stating The Insolvent Company’s turnover was £280,000 on the Bounce Back Loan application. This was paid into the company account on 15 September 2020.
• The balance on the account was £50.52, on 14 September 2020.
• Between 15 September 2020 and 10 December 2020, The Insolvent Company received payments of £10,126.33 giving total available funds of £60,176.85
• In this period, £17,390 was paid to a connected party for which he has been unable to evidence that it was for business purposes and £4,500 of transactions were for his personal use.

 The Insolvent Company was placed into creditors voluntary liquidation on 28 February 2022

•  At Liquidation, £56,305 was owed of which £50,000 was in respect of outstanding Bounce Back Loan, £6,305 were owed to trade creditors.
• Between 1 July 2020 to 28 February 2022 (date of liquidation) he has failed to ensure that The Insolvent Company maintained and/or preserved adequate accounting records, or in the alternative, has failed to deliver up such records. As a consequence, it has not been possible to:
• Establish the accuracy of the statement of affairs showing the stated NIL assets and the total amount owed in liabilities.
• Establish the purpose of transactions totalling at least £47,402 made from the Company’s bank account.”

Case 16 – Director disqualification for trading to the detriment and non delivery up of accounting records

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

The Banned Director caused The Liquidated Company to apply for a Bounce Back Loan (BBL) of £50,000 on 25 May 2020 using overstated turnover figures in the application form. Consequently, The Liquidated Company received more monies than it was entitled to from the BBL scheme, in that:

• On 03 June 2020, The Liquidated Company received a BBL of £50,000 which it was not entitled to. 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 BBL application The Liquidated Company’s turnover was stated as £200,000.
• Accounts filed at Companies House state that The Liquidated Company achieved turnover of £104,684 for the year ending 31 October 2019.
• Statements for The Liquidated Company’s bank account show credits totalling £85,253 in the 2019 calendar year.
• No accounting records have been delivered up to the Liquidator for the period required to evidence eligibility to apply for a BBL of £50,000. The Liquidated Company’s BBL entitlement according to bank statements would have been £21,313. or alternatively according to the accounts £26,171
• On 29 September 2021, The Liquidated Company entered into Creditor’s Voluntary Liquidation with total liabilities of £63,946.90, of which £50,000 was the BBL.”

Case 17 – Director disqualification for BBL offences and private use of company money

Director Disqualified for 6 years by Court Order.

Between 15 May 2020 and 22 June 2020, The Disqualified Director caused The Insolvent Company to apply for a Bounce Back Loan of £20,000 and used £11,899 of the funds for his personal benefit and caused The Insolvent Company to make net payments of £2,680 of the funds to an associate company and withdrew cash of £4,090 to the detriment of The Insolvent Company’ creditors in that:

•  The Director states that The Insolvent Company ceased to trade in March 2020.
• On 09 April 2020, a creditor of The Insolvent Company issued The Insolvent Company with a formal demand for payment for £45,222. No payment was made by The Insolvent Company in regard to this formal demand.
• On 14 May 2020, The Director applied for a Bounce Back Loan on behalf of The Insolvent Company.
• On 15 May 2020, The Insolvent Company received £20,000 into its bank account in relation to the Bounce Back Loan.
• On 02 June 2020, a winding-up petition was presented against The Insolvent Company.
• Between 15 May 2020 and 22 June 2020 payments totalling £34,238 were paid out of the bank account. £13,099 was paid to The Director, £17,000 was paid to a connected company (there were receipts of £14,320 from the connected company), there were cash withdrawals of £4,090, and there were bank charges of £49. No payments were made to other creditors outstanding at liquidation.
• On 23 September 2020, the company was placed into liquidation.

The Banned Director failed to ensure that The Insolvent Company maintained and/or preserved adequate accounting records or alternatively he has failed to deliver up such records as were maintained and/or preserved to the Official Receiver for the period 17 August 2018 to 23 September 2020, the date the company entered liquidation. As a result, it has not been possible to

• Determine whether payments of £62,601 were for a purpose connected with Logistics’ business including cash withdrawals of £22,357, payments of £23,172 to a connected company and £17,072 to unknown recipients.
• Verify the company’s income & expenditure.
• Verify The Disqualified Director’s remuneration.
• Verify when Logistics ceased trading.

Case 18 – Director disqualification for failing to maintain and delivery up accounting records

Director Disqualified for 5 years by a director signed undertaking.

The Banned Director failed to ensure that The Liquidated Company maintained and/or preserved adequate accounting records between 1 November 2017 and April 2020 or in the alternative, following liquidation, The Disqualified Director failed to deliver up to the Liquidator, when required, such records as were maintained and/or preserved, with the consequences that;

• It is not known whether the company recovered book debts valued at £410,680, listed in accounts to 31 October 2017, or whether they are still outstanding, nor can the Liquidator identify who the debtors are to recover any outstanding funds.
• It is not possible to verify that withdrawals identified by the Insolvency Service, amounting to £194,176.60 paid to individuals, cheques amounting to £69,604 and miscellaneous payments of £113,311, between 01 November 2017 and 08 April 2020 were for the benefit of BBP.
• It is not known how the interim claim of HMRC of £518,047.83 in respect of Corporation Tax, PAYE, CIS, penalties, and interest arose or whether it is accurate.
• The full details of the company’s trading activities between 1 November 2017 and 16 April 2020, the date of liquidation, are unknown and it is not possible to verify the cause of insolvency.
• The true position with regards to the company’s assets and liabilities are unknown.

Case 19 – Director disqualification for using company money for personal use

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

Between 23 March and 05 June 2021, The Banned Director caused The Insolvent Company to make payments for his own personal benefit of at least £46,709, which were to the detriment of The Insolvent Company’s creditors and at a time when he knew or ought to have known that The Insolvent Company would become insolvent as a result, in that:

• The Insolvent Company ceased trading on 22 March 2021.
• As at 22 March 2021, The Insolvent Company had liabilities of at least £36,722, in respect of bank loans and outstanding tax liabilities and the only company asset was £43,000 held in the company bank account.
• Between 23 March and 05 June 2021 an additional £13,424 was paid into The Insolvent Company’s bank account, being an outstanding trade receipt of £9,924, Covid relief of £3,300 and £200 from The Director.
• Between 23 March and 05 June 2021, The Director received payments from The Insolvent Company’s bank account totalling £40,500. In addition, £6,209 was transferred out of the account in respect of payments to The Disqualified Director’s personal mortgage account. In the same period The Insolvent Company made payments totalling £649 towards its bank liabilities and a single payment of £237 was made to HMRC.
• The Statement of Affairs filed within the liquidation proceedings showed £0 assets together with unsecured liabilities of £53,749 (being sums owed to HMRC of £23,053 and to a bank of £30,695).
• The bank has scheduled a claim within the liquidation proceedings of £35,397 in respect of a Bounce Back Loan of £25,000 (originally received on 24 June 2020) together with the balance of a business loan of £5,387 (of which £6,035 was outstanding on 22 March 2021) and an overdraft facility of £5,010.
• HMRC have scheduled a claim within the liquidation proceedings of £10,404 including £8,994 in respect of VAT which was based on Returns (03/20 of £2,690.17, 09/20 of £2,997.48, 03/21 of £2,152.30 and 06/21 of £1,154); of which £5,687.65 would have been due for payment by 22 March 2021.”

Case 20 – Director disqualification for Bounce Back Loan offences and personal use of company money

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

The Banned Director caused The Liquidated Company to breach the terms of the Bounce Bank Loan (BBL) scheme by overstating The Liquidated Company’s turnover in order to obtain BBL funds of £50,000 when The Liquidated Company was entitled to a maximum of £21,237. The funds were used for The Disqualified Director’s personal benefit and not for the economic benefit of The Liquidated Company and without the intention to complete timely repayments in the future, resulting in loss to the bank of £50,000,

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 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

• From 1 August 2019 (date of first receipt of income) and 01 March 2020, The Liquidated Company’s bank account shows an average monthly turnover of £7,079 giving an estimated annual turnover of £84,948.
• On 23 May 2020 The Banned Director made an application for a BBL stating turnover to be £203,67
• The Liquidated Company received a BBL of £50,000 on 27 May 2020, increasing the available bank balance to £63,618.
• Between 27 May 2020 and 22 July 2020 £63,560 was transferred from the company to The Director and used for her personal benefit, which included the £50,000 BBL funds.
• On 14 July 2020, DS01 Striking off Application, signed by The Director was filed at Companies House.
• The Liquidated Company failed to given notice to the bank of its application for dissolution as required under Section 1006 of the Companies Act 2006

On 13 October 2020 The Liquidated Company was dissolved and the BBL of £50,000 remains outstanding

Case 21 – Director disqualification for failing to maintain company records & HMRC offences

Director Disqualified for 10 years by a signed undertaking of the director.

The Disqualified Director failed to ensure that The Liquidated Company (LC) maintained and/or preserved adequate accounting records, or alternatively, failed to deliver up such records to the liquidator. Due to the inadequate accounting records for the period 12 October 2020 to 30 September 2021, the date of liquidation, it is not possible to:

• Verify the purpose and recipient (s) of unexplained cash withdrawals from the company bank account between 12 October 2020 and 03 June 2021, totalling £138,000;
• Quantify the company’s true HMRC liabilities at the date of liquidation;

At 30 September 2021, the date of the liquidation, LC had creditors totalling £95,000. Including £85,000 owed to HMRC in the way of VAT and PAYE/NIC.

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

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

Between 06 June 2019 and 08 July 2020, whilst appointed a director, The Company Director (The Company Director) failed to ensure that The Insolvent Company (IC) maintained and/or preserved adequate accounting records, or in the alternative failed to deliver up such records to the liquidator. As a result, it has not been possible to:

•  Establish whether 180 payments from IC bank accounts, of which 149 paid were paid in GBP with a total value of £1,935,050, and 31 paid in Euros with a value of 1,396,243, related to legitimate IC expenditure;
• Establish the source of five cash deposits totalling £87,750 into one of IC bank accounts between 21 November 2019 and 10 December 2019;
• Establish whether IC was eligible to obtain a Bounce Back Loan of £50,000, which it received on 03 June 2020, and whether it was used for the economic benefit of IC;
• Establish IC position regarding VAT and what its true liability is;
• Determine which individual or individuals were in control of IABW in the period;
• Determine the nature of IC business and its activities; and

Determine the true financial position of IC as at 01 July 2020 (the winding-up Order date).

Case 23 – Director disqualification for failing to maintain & deliver up accounting records

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

The Company Director, after being appointed director on 21/4/20, failed to ensure The Insolvent Company maintained and/or preserved adequate accounting records or, in the alternative, following liquidation, failed to deliver up The Insolvent Company’ accounting records to the liquidator when requested . As a result, it has not been possible to:

Verify whether a Bounce Back Loan of £50,000 introduced into the company on 13/05/2020 with the express intention of providing economic benefit to the business, was utilised for this purpose, including:

•  Four payments totalling £27,236 to third parties for an unknown purpose on 14/05/20.
• Payments of £3,700 and £1,915 to third parties for an unknown purpose on 16/05/20.
• A payment of £17,985 to a third party for an unknown purpose on 21/05/20.
• Establish the reason for payments to a third party of £22,877 on 17/06/20 and £2,020 on 21/06/20 following the receipt of a £25,000 local authority grant on 05/06/2020.

Case 24 – Director disqualification for Bounce Back Loan offences relating to two companies

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

On 6 May 2020, The Disqualified Director caused The Liquidated Company (LC) to apply for a Bounce Back Loan (BBL) for the amount of £50,000 and did not use the funds for the economic benefit of LC when he knew or ought to have known that LC was not eligible for the loan in that:

• 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 required was that for the calendar year 2019 or where a business was established after 1 January 2019 it is their estimated turnover. The business should be engaged in trading or commercial activity in the UK at the date of the application, carrying on business on 1 March 2020 and have been adversely affected by coronavirus and use funds for the economic benefit of the company.
• LC was incorporated on 26 February 2020.
• On 6 May 2020 the disqualified director applied for a BBL OF £50,000 and BMG has confirmed he declared a turnover of £250,000 in the application. A review of the company bank statements and accounting records reveals a zero turnover.
• On 18 March 2021 the company filed dormant accounts, at Companies House, for the period to 28 February 2021.
• On 14 May 2020 £50,000 of BBL funds were paid into the company account. On the 1 June 2020 these funds were transferred to an associated company.
• On 11 October 2021 the company entered liquidation with liabilities of £50,425 owed for the BBL only.
• On 6 May 2020, the disqualified director caused the Liquidated Company 2 (LC2) to apply for a Bounce Back Loan (BBL) for the amount of £50,000 and did not use the funds for the economic benefit of LC2 when he knew or ought to have known that LC2 was not eligible for the loan in that:
• 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 required was that for the calendar year 2019 or where a business was established after 1 January 2019 it is their estimated turnover. The business should be engaged in trading or commercial activity in the UK at the date of the application, carrying on business on 1 March 2020 and have been adversely affected by coronavirus and use funds for the economic benefit of the company.

 LC2 was incorporated on 27 February 2020.

•  On 6 May 2020 the disqualified director applied for a BBL of £50,000 and BD has confirmed he declared a turnover of £250,000 in the application. A review of the company bank statements and accounting records reveals a zero turnover.
• On 18 March 2021 the company filed dormant accounts, at Companies House, for the period to 28 February 2021.
• On 14 May 2020 £50,000 of BBL funds were paid into the company account. On the 1 June 2020 these funds were transferred to an associated company.
• On 11 October 2021 the company entered liquidation with liabilities of £50,524 owed for the BBL only.

On 6 May 2020, the disqualified director caused the Liquidated Company 3 (LC3) to apply for a Bounce Back Loan (BBL) for the amount of £35,000 and used the funds for his personal benefit when he knew or ought to have known that LC3 was not eligible for the loan in that:

• 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 required was that for the calendar year 2019 or where a business was established after 1 January 2019 it is their estimated turnover. The business should be engaged in trading or commercial activity in the UK at the date of the application, carrying on business on 1 March 2020 and have been adversely affected by coronavirus and use the funds for the economic benefit of the company.
• The company was incorporated on 27 February 2020.
• On 6 May 2020 the disqualified director applied for a BBL of £35,000 declaring a turnover of £178,000 in the application. A review of the company accounting records reveals a turnover of £4,327 whilst the bank statements reveal business income of £140,350.
• Between 19 May 2020 and 13 August 2020 £159,299 was transferred to a solicitor with regard to the purchase of properties.
• On 26 March 2021, upon sale of the property, £140,350 was paid into the LC3 bank account.
• On 26 March 2021 £100,750 was paid to BMG from the company bank account.
• On 1 April 2021 the disqualified director used £29,465 to purchase the rights to a private registration from BD. The Liquidator has had this independently valued at £11,000 whilst the director has made an offer of £3,000.
• On 11 October 2021 the company entered liquidation with liabilities of £33,851 owed for the BBL only.

Case 25 – Director disqualification for HMRC offences and using company money for personal reasons

Director Disqualified for 11 years by a director signed undertaking.

Between at least 01 July 2017 (the date that the 2015-2016 Corporation Tax,(CT), fell due and The Insolvent Company failed to make payment in full), and 30 September 2019, (when it ceased to trade), I, failed to ensure that The Insolvent Company met its financial commitments as regards Corporation Tax (CT) and Value Added Tax (VAT) and caused The Insolvent Company to continue trading whilst withdrawing funds for the benefit of myself, totalling at least £41,850 net. As a result, The Insolvent Company became unable to meet its financial commitments to majority creditor HMRC as and when they became due, and liabilities to HMRC totalled £107,525.98, (comprised of VAT £50,330 and CT £57,196), at liquidation on 29 September 2020, with other scheduled creditors at only £668, in that;-

CORPORATION TAX

• The Insolvent Company filed a CT return for the period ended 30 September 2016 which showed that £5,040 was due in respect of Corporation Tax due for payment by no later than 01 July 2017. The Insolvent Company underpaid penalties and interest due against this liability, resulting in an outstanding balance of £492 on Liquidation.
• The Insolvent Company filed a CT return for the period ended 30 September 2017 which showed that £10,130 was due in respect of Corporation Tax due for payment by no later than 01 July 2018. The Insolvent Company made no payments against this liability, resulting in an outstanding balance of £10,130 on Liquidation.
• The Insolvent Company filed a CT return for the period ended 30 September 2018 which showed that £26,955 was due in respect of Corporation Tax due for payment by no later than 01 July 2019. The Insolvent Company made no payments against this liability, resulting in an outstanding balance of £26,955 on Liquidation.
• The Insolvent Company filed a CT return for the period ended 30 September 2019 which showed that £17,833 was due in respect of Corporation Tax due for payment by no later than 01 July 2020. The Insolvent Company  made no payments against this liability, resulting in an outstanding balance of £17,833 on Liquidation.
• The Statement of Affairs records CT due of £57,037

VAT

• The Insolvent Company registered for VAT on 17 September 2013 and VAT returns were submitted every quarter until September 2019.
• From the quarter ended June 2016 onwards, The Insolvent Company failed to make payments when due in respect of VAT, leading to a liability of £50,331 at the date of the liquidation including surcharges of £6,383.
• HMRC action history notes show that I was contacted by telephone on 07 November 2018 and confirm I was aware of the VAT arrears.
• Bank statements show only two payments, amounting to £5,090, were made to HMRC, being £3,054 on 21 January 2019 and £2,036 on 28 February 2019.

MOVEMENTS ON THE DLA

• Micro accounts submitted to Companies House for the year ending 30 September 2017, record Current Assets of £39,074, so the Director Loan Account would have been no greater than this at this point.
• Between at least 23 July 2018, (the earliest bank statement available), to 30 September 2019, when trading ceased, of the £119,807 debited from the account, £43,250 was transferred to me recorded as either loan, salary, dividend, or pay and in addition, debits of at least a further £20,117 are alleged to be personal expenditure. In the same period, deposits totalling £1,400 were made by me into the account.
• Despite me stating in my director questionnaire that trading ceased on 30 September 2019, a further £2,447 was debited from the account after that date, including a £1,400 salary payment to me on 21 October 2019 and the balance appears to be used mainly for personal expenditure.
• At liquidation the loan account position was alleged by the liquidator to be £94,920 . It would therefore appear that I had traded RLCL to my personal benefit and to the detriment of HMRC.

Case 31- Director disqualification for HMRC offences and trading to the detriment of HMRC

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

The Banned Director failed to ensure The Insolvent Company complied with its statutory obligations to HMRC to make payment of its liabilities as and when due and caused it to trade throughout at risk and to the detriment of HMRC, in that:

VAT

• The Insolvent Company was registered for VAT as from 2 May 2016 and submitted VAT returns to HMRC for the 9 VAT periods from 08/16 (3 months to 31 August 2016) to 08/18 (3 months to 31 August 2018), when it ceased to trade, declaring a total liability due of £72,981. No payment was made on account of these liabilities.
• As a consequence of the non-payment HMRC also raised default surcharges totalling £5,407 for VAT periods 05/17 to 08/18. No payment was made by The Insolvent Company on account of these liabilities.
• At the liquidation VAT liabilities of £78,389 arising over The Insolvent Company period of trading remained unpaid.

PAYE/NIC

• Returns submitted to HMRC record The Insolvent Company had a PAYE/NIC liability of £14,378 for the tax year 2016/2017 (6 April 2016 to 5 April 2017). No payments were made by The Insolvent Company on account of this liability. HMRC credited The Insolvent Company with the employers’ NIC allowance of £3,000 leaving £11,378 unpaid at the liquidation.
• Returns submitted to HMRC record The Insolvent Company had a PAYE/NIC liability of £15,039 for the tax year 2017/2018 (6 April 2017 to 5 April 2018). No payments were made on account of this liability. HMRC credited The Insolvent Company with the employers’ NIC allowance of £3,000 leaving £12,039 unpaid at the liquidation.
• Returns submitted to HMRC record The Insolvent Company had a PAYE/NIC liability of £4,407 for the 6-month period of the 2018/2019 tax year, 6 April 2019 to 5 September 2019. No payments were made on account of this liability. HMRC credited The Insolvent Company with the employers’ NIC allowance of £1,801 leaving £2,606 unpaid at the liquidation.
• At the liquidation PAYE/NIC liabilities of £26,023 remained unpaid.

Gaming duty

• The Insolvent Company had a gaming duty liability of at least £7,471 encompassing the 10 quarters of its period of trading from May 2016 to cessation. No payment was made on account of this liability which remained outstanding at the liquidation.

Corporation tax

• HMRC have claimed £200 penalty due to the failure to file the corporation tax return for 2018.
• Treatment of HMRC in comparison to other parties
• The VAT returns record The Insolvent Company income over its period of trading to amount to £936,216, none of which was used to settle The Insolvent Company increasing liability to HMRC, rather they were paid away to other parties
• The Insolvent Company was at all times insolvent and the payment of other parties in priority to HMRC resulted in HMRC being exposed to an increasing risk of loss. At 30 April 2017 £53,914 was due to HMRC and £47,274 to other parties. At 30 April 2018 HMRC were due £97,813 and other parties £86,293. At the cessation of trade HMRC was due at least £112,084 and other creditors £18,366.

Case 32 – Director disqualification for HMRC offences and making false Onward Supply Relief declarations

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

Between 1 December 2016 and 14 June 2017 The Disqualified Director incorrectly claimed Value Added Tax (VAT) relief from Her Majesty’s Revenue and Customs (HMRC) by making incorrect Onward Supply Relief (OSR) declarations and made false declarations in respect of Customs Duty, Import VAT and Export VAT in respect of The Liquidated Company. Incorrect claims regarding OSR of £983,941, under declared Customs Duty of £324,636 and under declared Import VAT of £486,293 remained outstanding on the date The Liquidated Company entered liquidation.

The Liquidated Company was unable to supply HMRC with documentary commercial evidence that goods had been supplied onwards to an EU country as required to claim OSR under Public Notice 702/7.

• HMRC established that The Liquidated Company was not entitled to claim OSR and did not meet the conditions for claiming OSR.
• HMRC established that the Liquidated Company did not have a genuine commercial role in the supply chains.
• On 16 August 2018, as a result of the refusal of OSR HMRC issued a demand for £983,941 wrongly claimed for the period 1 December 2016 and 14 June 2017.
• On 17 July 2019 HMRC issued a penalty against The Liquidated Company for £885,547 relating to evasion of OSR.

• The Liquidated Company was unable to supply HMRC with evidence that declarations of the value of imported goods was correct.
•  The Liquidated Company did not take action to ensure that the values of goods declared on HMRC were correct.
•  HMRC calculated the correct valuation of the imported goods using the methods described in HMRC Public Notice 252.
•  On 24 February 2020, as a result of HMRC calculations of the correct valuation of goods imported in the period 1 December 2016 and 14 June 2017, HMRC issued a claim against VCC for £324,636 of Customs Duty and £486,293 of Import VAT.
•  No payment was made by The Liquidated Company in respect of the wrongly claimed OSR, the falsely declared import values and penalties and the entire amount of £2,680,417 remained outstanding at the date of liquidation.

Case 33 – Director disqualification for failing to maintain or deliver up accounting records

Director Disqualified for 8 years by a director signed undertaking

Director Disqualified for X years by Order of the Court / Court Order / Order at trial. Director Disqualified for X years by a signed undertaking of the director / an undertaking agreed by the director / a director signed undertaking

The Company Director (The Company Director) failed to ensure that The Insolvent Company (IC) maintained and/or preserved accounting records which were adequate to explain the trading and financial position of IC between 31 January 2020 and Liquidation or in the alternative following the Liquidator’s appointment on 2 December 2021, failed to deliver up adequate accounting records. As a consequence it has not been possible to account for the following:

1. a) The position regarding the company’s income:

• Company bank statements for the period 31 January 2020 to 2 December 2021 reveal income in the sum of £2,290,332 including £589,546 paid by HMRC Job Retention Scheme and £50,000 in a Bounce Back Loan. In the absence of company accounting records it is not possible to determine if these amounts are a true reflection achieved during the period of trading.

1. b) The position regarding the company’s expenditure:

• Company bank statements for the period 31 January 2020 to 2 December 2021 reveal expenditure in the sum of £2,290,332 of which £167,207 was paid to unknown third parties. In the absence of company accounting records it is not possible to determine if these amounts were expended for the benefit of the company.
• On 14 May 2020 the company received a Bounce Back Loan (BBL) in the sum of £50,000 which increased the bank balance to £78,289. Between 14 May 2020 and liquidation £167,207 was paid to unknown parties. In the absence of accounting records it is not possible to determine if the BBL funds were used for the economic benefit of the company.

1. c) The position regarding the company assets:

• The company failed to file accounts to 31 October 2020, due by 17 October 2021. In the absence of the company accounting records it is not possible to determine the company asset position at liquidation and whether any assets were disposed of for the benefit of the company.
• The inability to verify/substantiate the level of remuneration paid to the director and the amounts owed to, or owed by, the director in respect of any director’s loan account.

Case 34 – Director disqualification for failing to maintain / delivery up accounting records

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

The Director Disqualified failed to ensure The Liquidated Company maintained and/or preserved adequate accounting records from at least 01 October 2015 through to Liquidation on 22 March 2021. Or in the alternative, following the liquidation he failed to deliver up such records as and when required to do so to the Joint Liquidators. As a result of these failures it has not been possible to establish:

• The accuracy of the Micro company accounts filed at Companies House for year-end periods to 30 September 2016 and 30 September 2017 respectively, in that The Director has confirmed they were generated and filed by him without sufficient expertise as to ensure they complied with company law.
• The accuracy and legitimacy of Value Added Tax (VAT) returns submitted on behalf of The Liquidated Company to HM Revenue & Customs (HMRC) that led to VAT repayments totalling £1,434,576 between 01 November 2018 and 28 February 2019.
• The company’s true liability to HMRC considering their claim in the liquidation of £1,506,364 regards VAT.
• The true purpose of payments totalling £393,746 to a connected party between 01 January 2019 and 31 March 2019 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £229,762 to various automotive suppliers between 01 January 2019 and 31 March 2019 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £113,046 to unknown persons between 01 January 2019 and 31 March 2019 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £26,257 to various retail type establishments between 01 January 2019 and 31 March 2019 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £14,701 to online gaming providers between 01 January 2019 and 31 March 2019 and whether these represent bona fide business transactions.
• The true purpose of cash withdrawals totalling £4,610 between 01 January 2019 and 31 March 2019 and whether these withdrawals were applied towards bona fide business transactions.
• The true level of assets held by the company and the extent to which the Joint Liquidators have been hampered in realising any potential recoveries for creditors.
• The true level of company debtors and the extent to which the Joint Liquidators have been hampered in realising potential recoveries.

Case 35 – Director disqualification for Bounce Back loan breaches

Director Disqualified for 9 years by Order of the Court.

On 30 May 2020 The Banned Director caused The Liquidated Company to breach the conditions of the Bounce Back Loan (BBL) scheme by applying for a BBL of £47,500 when he knew or ought to have known that The Liquidated Company was not eligible for a BBL of that amount.

In addition, on 15 June 2020, The Director Disqualified caused The Liquidated Company to utilise £28,044 of the BBL advance to repay loans that the directors had previously made to the company, which was not for the economic benefit of The Liquidated Company.

In that

• under the BBL scheme a business that was established before 01 January 2019 could apply for a loan of between £2,000 and 25% of its turnover in the 2019 calendar year, up to a maximum of £50,000, whereas an eligible business that was established after 01 January 2019 could apply for a loan of between £2,000 and 25% of its estimated turnover in the first 12 months of trading;
• The Liquidated Company was incorporated before 01 January 2019 but filed dormant accounts at Companies House for the period ended 31 July 2019 and began trading in August 2019, so should have estimated its turnover for the 12 month period to 31 July 2020;
• on 30 May 2020 The Director applied for a BBL of £47,500 for The Liquidated Company, declaring a turnover of £190,000. The Director has stated that this estimate was for an alternative period, from 01 April 2020 to 31 March 2021, which was not in accordance with the eligibility conditions;
• the filed accounts for The Liquidated Company’s first period of trading, from 01 August 2019 to 30 November 2020, showed a turnover of £11,951;
• in the BBL application, The Banned Director undertook that The Liquidated Company would use the loan to provide economic benefit to the business and not for personal purposes;
• £47,500 was advanced on 01 June 2020 and on 15 June 2020 The Disqualified Director caused The Liquidated Company to repay £30,000 to the directors, of which at least £28,044 could only have come from the BBL advance;
• The Liquidated Company went into liquidation on 26 October 2021 without having made any BBL repayments.

Case 36 – Director disqualification for HMRC / BBL offences and overdrawn director loan account

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

Between 02 March 2020 and 18 January 2021, at a time when the solvency of The Insolvent Company was contingent upon the repayment of an overdrawn director’s loan account of £197,375, and after HM Revenue & Customs (HMRC) had rejected a Time to Pay proposal in respect of Corporation Tax liabilities of £102,544, The Banned Director caused The Insolvent Company to make payments to himself totalling £112,070 to the detriment of HMRC and a Bounce Back Loan provider:

HMRC Corporation Tax Liabilities

• On 02 July 2019, The Insolvent Company accountant confirmed the Corporation Tax liability for the year ended 30 November 2018 was £68,040, of which £39,588 was in respect of tax due on the outstanding Director’s Loan Account. The full amount was due for payment by no later than 01 September 2019.
• On the same date, The Insolvent Company accountant submitted a Time to Pay proposal to HMRC, offering to pay £4,273 a month for 24 months against total Corporation Tax liabilities of £102,544, including £34,504 which had fallen due for payment by 01 September 2018, and £68,040 which was due for payment by 01 September 2019. The Time to Pay proposal was rejected by HMRC on 14 October 2019, by which point the full balance of £102,544 was overdue.
• Between 12 February and 19 February 2020, using funds provided by family members, The Disqualified Director made three payments to HMRC totalling £44,392 from his personal bank account, of which £41,598 was paid towards The Insolvent Company overdue Corporation Tax liabilities and £2,794 towards an outstanding The Insolvent Company Value Added Tax (VAT) liability.
• The Insolvent Company made no further payments to HMRC prior to entering liquidation on 19 March 2021.

Bank Receipts and Payments

• Between 26 January 2020 and 03 December 2020, The Insolvent Company received total sales income of £130,320 into its main bank account. During that period, The Director made payments to himself from The Insolvent Company bank account totalling £71,665, the first of which was made on 02 March 2020 and the last on 25 September 2020. The payments were used to fund his personal living expenses. During the same period £10,611 was also paid to an employee benefits company in respect of childcare provision received by The Director.
• Other payments made during the same period included a total of £19,843 paid to a loan provider in respect of a loan account personally guaranteed by the Disqualified Director, £12,898 paid to HMRC in respect of VAT, £6,000 refunded to a client and £1,912 paid in respect of professional service and subscriptions. No payments were made to HMRC from The Insolvent Company income during this period in respect of the outstanding Corporation Tax liability.
• On 5 May 2020, The Banned Director made an application on behalf of The Insolvent Company to a financial institution for a Bounce Back Loan of £50,000 and the funds were received into The Insolvent Company bank account on 11 May 2020. The account was overdrawn by £9 at the time, leaving a balance of £49,991 after receipt of the loan. The loan criteria meant the funds could only be used to provide economic benefit to the company and not for personal purposes.
• Between 26 May 2020 and 26 June 2020 further payments totalling £48,968 were made to the Director and used to fund personal living expenses to no apparent economic benefit to the company.
• On 13 January 2021, after instructing an Insolvency Practitioner to place The Insolvent Company into Creditors Voluntary Liquidation on 16 November 2020 and having incorporated a new company on 04 December 2020, a payment of £3,200 was received into a second bank account held by The Insolvent Company, from which a further £2,200 was transferred to The Disqualified Director between 14 January and 18 January 2021, and also used to fund personal living expenses.
• The Disqualified Director’s remuneration from The Insolvent Company for the year ended 30 November 2019 was £8,563. After allowing for the same salary for the year ended 30 November 2020, The Director received total net payments of £112,070 between 02 March 2020 and 18 January 2021, to the detriment of HMRC and the Bounce Back Loan provider.
• Upon liquidation, The Insolvent Company liabilities totalled £260,178 of which £135,420 was due to HMRC, including Corporation Tax and interest of £82,473 and VAT of £52,947, and £50,000 was due to the Bounce Back Loan provider.

Case 37 – Director disqualification for HMRC offences and not filing statutory returns

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

The Banned Director 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 January 2018 in respect of VAT, and 22 April 2018 in respect of PAYE/NIC, until cessation of trade in July 2019. As a result, VAT liabilities (including surcharges) in the sum of at least £38,710, and PAYE/NIC liabilities in the sum of £8,681, were incurred during the trading period and remained overdue and outstanding on liquidation. More specifically:

VAT

•  The Company filed VAT returns in respect of VAT periods 11/17 to 02/19 which record total VAT due in the sum of £33,756.40.
•  The Company did not file VAT returns in respect periods 05/19 and 08/19 both of which were due for filing prior to liquidation.
•  HMRC raised an assessment in the sum of £3,025 in respect of VAT period 05/19. However, management account record VAT in the sum of £3,087.96 was due in respect of this period.
•  Surcharges levied by HMRC in respect of periods 08/18, 11/18, 02/19 and 05/19 totaled £1,865.78.
•  The Company ceased trading on 31 July 2019 and entered liquidation on 29 April 2020.
•  Further assessments were raised in respect of period 05/20 (covering the period 1 June 2019 to 31 May 2020) in the sum of £6,836.00, and 08/20 in the sum of £2,292.

PAYE

•  HMRC’s final claim records outstanding PAYE/NIC on liquidation the sums of £3,881.82 (tax year 2017/18), £4,220.10 (tax year 2018/19) and £599.22 (tax year 2019/20)
•  The balance on the Company’s PAYE/NIC ledger was nil as at period ended 5 November 2017 (Month 7 of 2017/18). From this point, the Company’s RTI returns confirm that PAYE/NIC liabilities in the sum of £20,881.02 were incurred by the Company to period ended 5 August 2019 (Month 4 of 2019/12).
•  Credit and payments in the sum of £12,199.88 were applied to the PAYE/NIC account over the same period.
•  When these credits are applied to the earliest outstanding periods, they are sufficient to discharge the Company’s PAYE/NIC liabilities to month ended 5 March 2018 (month 11 of 2017/18) in full.
•  The first period not cleared in full is month ended 5 April 2018 (Month 12 of 2017/18) which was due for payment in full by 22 April 2018.
•  PAYE/NIC liabilities in the sum of £8,681 remained outstanding on liquidation relating to the period Month 12 of 2017/18 to Month 4 of 2019/20.

Comparative treatment

•  HMRC is the majority creditor in the liquidation having claimed the total sum of £62,683.54.
•  From 7 January 2018 to cessation of trade in July 2019, the Company’s management accounts record the Company received credits totalling £239,702.55 and expended £245,520.90. Of the sum expended, HMRC records confirm that over the same period, a single payment of £2,231.72 was made in respect of PAYE/NIC, and the Company’s management accounts confirm a single payment in the sum of £4,867 in respect of Corporation Tax. No payments were made in respect of VAT.
•  The Company’s management accounts also record that he received net payments in the sum of £28,147.36 over the same period.

Case 38 – Director disqualification for accounting record irregularities

Director Disqualified for 4 years by a director signed undertaking.

The Disqualified Director failed to ensure that The Insolvent Company Limited (The Insolvent Company) maintained and/or preserved adequate accounting records from 01 February 2018 through to Liquidation on 06 July 2021. Or in the alternative, following the liquidation failed to deliver up such records as and when required to do so.

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

• The true purpose of payments totalling £103,350 to The Director between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £91,823 to the co-director between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £18,047 to connected companies between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £114,840 to various unidentified recipients from the The Insolvent Company bank account between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £94, 810 to various retail type establishments between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £19,641 towards apparent personal retail and subscription services between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of cash withdrawals totalling £24,106 between 01 January 2019 and 01 February 2018 and 06 July 2021 and whether these withdrawals were applied towards bona fide business transactions.
• The true purpose of payments totalling £76,624 to various automotive related businesses between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £9,450 to various travel and accommodation providers between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The company’s true liability to HM Revenue & Customs considering their claim in the liquidation of £77,062 regards Pay as You Earn (PAYE) and National Insurance Contributions (NIC).
• The company’s true liability to HM Revenue & Customs considering their claim in the liquidation of £8,025 regards Value Added Tax (VAT).
• The true level of assets held by the company and the extent to which the IP has been hampered in realising any potential recoveries for creditors.
• The true level of company debtors and the extent to which the IP has been hampered in realising potential recoveries.

Case 38 – Director disqualification for BBL offences and misleading information

Director Disqualified for 3 years by a director signed undertaking.

Between 18 May 2020 and 12 June 2020, The Disqualified Director allowed The Liquidated Company (‘LC’) to provide misleading information to obtain two Bounce Back Loans (‘BBLs’), totalling £88,000, resulting in LC obtaining £74,803 more than it was eligible for under the BBL scheme, in that:

•  Businesses adversely impacted by Covid 19 could apply for a BBL.
•  Only one BBL was permitted to be obtained per business, for up to 25% of the turnover of a business in 2019, to a maximum value of £50,000. Funds provided were to be used for the economic benefit of the company.
•  Micro-entity Accounts were filed at Companies House on 11 December 2019, for the period ending 30 November 2019, which were signed by him. There were no formally appointed directors recorded at Companies House on the date he signed the accounts. On the same day, a Corporation Tax return was filed with HMRC for the same period, declaring turnover of £51,000.
•  Bank receipts for December 2019 total £1,788, which gives estimated total turnover for 2019 of a maximum £52,788. LC was therefore eligible for a BBL of no more than £13,197.
•  On 18 May 2020, he was appointed as the sole formally appointed director of LC, although it is stated his unappointed co-director was in control of LC.
•  LC applied for a BBL from Bank A. In the application process, LC was asked for Turnover 2019, to which LC provided the misleading figure of £200,000. Application information provided by Bank A record that applicant on behalf of GDMSS was stated to be him, and the loan agreement was signed electronically by The Director on 19 May 2020.
•  Bank A paid £40,000 into the bank account of LC on 20 May 2020, which was £26,803 more than LC was eligible for under the BBL scheme.
•  Contrary to the terms and conditions of the scheme that only one BBL could be obtained for each company, LC made a second BBL application to Bank B, stating that turnover was £192,000. The BBL agreement was signed electronically by the Director on 11 June 2020.
•  Bank B paid £48,000 into the bank account of GDMSS on 12 June 2020. LC was not eligible to receive any of the £48,000 obtained from Bank B, as only one BBL loan was allowed, and LC had already obtained £26,803 more than it was eligible for from Bank A.

Case 39 – Director disqualification for HMRC / BBL offences and overdrawn director loan account

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

The Banned Director failed to ensure that The Insolvent Company maintained and/or preserved adequate records or, in the alternative, he has failed to deliver up sufficient accounting records to explain The Insolvent Company financial affairs for the period from at least 01 August 2019 to its cessation in August 2020. In that:

•  The last accounts were prepared for the year ending 31 July 2018;
•  The accountants have advised that they have records for the following year, but do not hold any after July 2019;
•  Some cash purchase invoices have been delivered up to the liquidator, however these cannot be matched with cash withdrawals on the bank statements and their total is more than such withdrawals;
•  Bank statements from 01 August 2019 show receipts of £233,267;

 Without sales records it is not known whether:

• These were all the moneys received by The Insolvent Company or if there were transactions, such as cash sales, which did not go through the bank account;
• This was the only bank account used by The Insolvent Company;
• These were all the moneys due to The Insolvent Company; or
• Any debts remained outstanding at the liquidation date;

 The bank statements show payments of £227,590 from 01 August 2019, of which:

• cash withdrawals were £51,684;
• cheque payments totalled £33,862;
• credit card payments were £2,452;
• he received £1,700; and
• payments which appear to be personal totalled £7,469;

In the absence of full purchase records it is not possible to explain these payments or verify that they were legitimate company expenditure (or were accounted for in a director’s loan account);

Without full records it is not possible to verify that a Government-backed bounce back loan of £27,000 was used for the economic benefit of the Company;

In the absence of full sales and purchase records it is not possible to ascertain if VAT assessments raised by HM Revenue & Customs (‘HMRC’) were reasonable.

He failed to register The Insolvent Company for VAT when its income had exceeded the threshold and did not submit VAT returns to HMRC once The Insolvent Company was registered in January 2019, resulting in assessments being raised for £90,670 for the period from 01 May 2015 to The Insolvent Company liquidation. In addition, no payments were made in respect of VAT and The Insolvent Company trading was therefore to the detriment of HMRC from at least January 2019. In that:

•  Following a visit and investigation by HMRC it was determined by The Insolvent Company accountant in June 2018 that the Company had exceeded the VAT threshold by March 2015 and should therefore have registered for VAT on 01 May 2015;
•  The VAT registration form was received by HMRC on 09 January 2019 and IC was registered with effect from 01 May 2015;
•  No returns were filed and HMRC raised assessments for the period 01 May 2015 to 31 January 2019 and for the following quarters to The Insolvent Company liquidation in October 2020, totalling £90,670;
•  Bank statements disclosed payments of £364,929 from 01 January 2019, no payments were made to HMRC;

 At the liquidation date HMRC was the majority creditor as trade creditors were owed £14,985 according to the statement of affairs.

Case 40 – Director disqualification for HMRC offences and trading to the detriment of HMRC

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

The Director Disqualified failed to ensure that The Insolvent Company met its financial commitments as regards Corporation Tax (‘CT’) and VAT and caused The Insolvent Company to trade to the detriment of HM Revenue & Customs (‘HMRC’) and to his own benefit from at least 01 September 2017 when CT for the year ended 30 November 2016 fell due, to its cessation in April 2021. As a consequence, HMRC is owed at least £180,123 in unpaid taxes and surcharges. In that:

• Information provided by HMRC shows that £18,894 was due for CT for the year ended 30 November 2016, which should have been settled by 01 September 2017;
• Although payments were made towards this liability, from September 2017 to June 2019, at the liquidation date a balance of £358 remained due for this year;
• Further CT accrued over following years, no further payments were made and a total of £91,428 was outstanding at the date of the liquidation;
• The Insolvent Company registered for VAT on 18 November 2015 and returns were filed to the quarter ended February 2021, thereafter HMRC raised assessments;
• VAT was not paid on time for most periods and at the liquidation date a balance remained unpaid from the quarter ended November 2017;
• A total of £82,057 was due in unpaid VAT, which includes an estimate for the period from March 2021 to The Insolvent Company cessation;
• The accounts do not show any trade creditors, but the amount due to HMRC increased in each year, from £27,739 in the year to 30 November 2016 to £180,123 at the liquidation date;
• The Director had an overdrawn director’s loan account which increased from £14,627 as at November 2016 to £340,136 by the liquidation date;
• Bank statements from 01 December 2018 show total payments of £489,479 of which £390,939 (net) was paid to The Director, £3,870 was withdrawn in cash and £28,770 was paid to HMRC.
• In May 2020 The Banned Director caused The Insolvent Company to obtain a Government-backed bounce back loan (‘BBL’) of £40,000 and did not use the entirety of the monies for the economic benefit of the business, contrary to the terms of the BBL scheme. In that:
• On 12 May 2020 a BBL of £40,000 was paid into DRM’s bank account;
• By 28 July 2020 these monies had been dissipated;
• In this period The Director Disqualified withdrew £47,980, of which at least £35,040 was funded from the BBL;
• In the year to 30 November 2020 draft accounts show that The Director’ overdrawn director’s loan account increased by £134,124, which increase was funded in part by the BBL.

Case 41 – Director disqualification for HMRC and VAT offences

Director Disqualified for 2 years by a director signed undertaking.

As a director of The Dissolved Company, The Company Director abrogated her responsibilities by failing to ensure The Dissolved Company submitted accurate company returns for Value Added Tax (VAT) which resulted in the company deliberately under-declaring and underpaying VAT. In that:

•  On 12 September 2018 The Company Director’s co-director submitted a voluntary disclosure to HMRC on behalf of The Dissolved Company. He stated that the company had been involved in deliberate and fraudulent conduct which had brought about a loss of tax and/or duties.
•  On 12 November 2020, HMRC described the disclosed inaccuracy as under-declared cash sales and directors’ personal expenses incorrectly claimed as business expenses for VAT periods ending 11/11 to 08/18. As a result of these inaccuracies:
•  On 2 February 2021 VAT assessments were issued by HMRC for the VAT periods ending 11/11 to 08/18 totalling £37,645.00.
•  On 5 February 2021 HMRC issued penalty assessments totalling £11,580.20 because of the inaccuracies.
•  HMRC consider that the behaviour in submitting inaccurate company VAT returns was deliberate.
•  The Company Director states that she had nothing to do with The Dissolved Company and her co-director had control of the business.
•  On the 27 April 2022 The Dissolved Company was subject to a winding up order following a petition submitted by HMRC for the sum of £148,221.23.

Case 42 – Director disqualification for HMRC / BBL offences and overdrawn director loan account

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

Between 31 July 2020 and 23 March 2021 (date of liquidation), The Director Disqualified caused The Insolvent Company to enter into transactions to the detriment of creditors which she knew or ought to have known would result in The Insolvent Company becoming insolvent, in that:

• The Insolvent Company traded as a Restaurant under the name of H. In order to do so, The Insolvent Company owned a series of assets including, but not limited to, stock; fixtures and fittings; electronic assets; kitchen equipment; intellectual property and goodwill.
• The Insolvent Company stopped trading in March 2020 due to Covid-19 restrictions.
• By June 2020, The Insolvent Company was in arrears with the landlord with the deposit account having been depleted to settle previous rent due.
• As of 31 July 2020, The Insolvent Company had creditors of at least £400,051.35 of which at least £175,676.52 was owed to HMRC and £224,374.83 was owed to eight other creditors.
• On 31 July 2020, the first of a series of payments was received for the sale of The Insolvent Company’s assets.
• Between 31 July 2020 and 23 March 2021, The Insolvent Company received £220,164.00 in relation to assets sold to third parties.
• Between 31 July 2020 and 23 March 2021, payments were made from The Insolvent Company’s bank account directly to The Banned Director: Using reference Repayment of Loan, six payments were made totalling £180,000.00 while five payments were made totalling £14,919.15 referenced as Salary. Further payments and purchases totalling £8,467.63 were made for what appears to be The Director’s personal benefit.
• During the same period, five payments totalling £42,268.91 were made to a connected party for Salary and a further payment was made for £19,000.00 with no reference, in full repayment of a loan.
• During the same period, The Insolvent Company paid £83,173.33 to trade creditors including HMRC.
• As of 23 March 2021, The Insolvent Company had creditors of at least £1,117,664.16 of which at least £280,056.99 was owed to HMRC and £338,836.65 was owed to the eight aforementioned creditors. The Director’s director’s loan appears to have been repaid in full as she has submitted an employee’s claim only.”

Case 43 – Director disqualification for HMRC / BBL offences and overdrawn director loan account

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

The director disqualified caused the Liquidated Company to breach the terms and conditions of the Bounce Back Loan (BBL) scheme by applying £27,811 of £50,000 BBL monies received by  the Liquidated Company (BBL of £15,000 on 9 December 2020 and a top up loan of £35,000 on 11 February 2021) for his own benefit rather than for the economic of the Liquidated Company  in that:

•  The Bounce Back Loan Scheme conditions state that funds are to be used for the economic benefit of the business and not for personal purposes.
•  On 7 December 2020, the banned director applied for a Bounce Back Loan of £15,000 which was received on 9 December 2020. Prior to receipt of the Bounce Back Loan, the account balance was overdrawn in the sum of £4,435.
•  On 9 February 2021, the disqualified director applied for a BBL top-up of £35,000 which was received on 11 February 2021.
•  Between 9 December 2020 and 1 June 2021, in addition to the BBL proceeds, bank statements record total credits of £6,749.
•  Between 9 December 2020 and 2 June 2021, £22,040 was transferred to the director’s personal account (including £9,900 between 4 May 2021 and 2 June 2021).
•  Between 15 December 2020 and 18 June 2021, £5,771 was withdrawn in cash (including £2,450 between 4 May 2021 and 18 June 2021).
•  The disqualified director has provided no evidence to show that the £27,811 was used for business expenditure and the economic benefit of the bust company.
•  At liquidation on 13 September 2021, liabilities totalled £87,508 of which £50,000 was owed to the bank in respect of the Bounce Back Loan and £37,508 was owed to HMRC.

Case 44 – Director disqualification for lack of financial control and supervision

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

The Company Director abrogated his responsibilities as a director of The Dissolved Company by failing to ascertain or keep himself informed about the company and its financial position and activities, and by taking no active role in controlling or supervising its affairs:

• The Company Director was a director of the company between 30 November 2017 and the company liquidation on 20 September 2018;
• in January 2018 the company sold its business and assets for £1,250,000;
• on 29 January 2018, the purchaser paid £750,000 of the purchase price to the company shareholder rather than to the company;
• the sale completed on 31 January 2018 at which point the company had assets of £1,030,345. This included £469,533 owed to the company by associates but these monies were not repaid to the company before the liquidation;
• on 31 January 2018 DC had liabilities of £739,813 including at least £198,174 due to Her Majesty’s Revenue & Customs (HMRC). Additional HMRC liabilities of £300,776 had already accrued by 31 January 2018 and fell due for payment before liquidation, but no further payments were made to HMRC although they were the company’s largest creditor;
• between 29 January and 03 September 2018 payments of £508,201 were made from the company bank account and a further £58,807 was paid out on its behalf by the purchaser, including a further £160,350 that was paid to or on behalf of the company shareholder and its associates, but The Company Director has said that he did not make any decisions regarding the day-to-day affairs of the company;
• the company went into liquidation on 20 September 2018 with assets of £55,378 and liabilities of £617,615, including £499,762 owed to HMRC. No amounts owed by associated companies at the liquidation date were disclosed in the company statement of affairs and the liquidators have received no money from associated companies in the liquidation.

Case 45 – Director disqualification for HMRC offences

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

From 1 October 2011 The Banned Director failed to ensure that The Liquidated Companies complied with its statutory obligations to register for VAT when its turnover exceeded the threshold requiring it to do so, in that:

• Following an investigation by HM Revenue and Customs (hereinafter referred to as HMRC) The Liquidated Company was compulsorily registered for VAT on 4 February 2019, backdated to 1 October 2011.
• HMRC consequently raised assessments of VAT totalling £419,966.82 for the period that The Liquidated Company should have been VAT registered, which have materially contributed to the company’s deficiency:
• For the full period of trading no VAT returns have been submitted and no payments have been made.

Case 46 – Director disqualification for HMRC and VAT offences and not delivering up records

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

The Disqualified Director caused or allowed the Liquidated Company to falsely claim VAT repayments totalling at least £192,388.76 from HMRC for VAT period ending 31 January 2020 in that

• The Liquidated Company was registered for VAT on 1 October 2018;
• The Liquidated Company has been in receipt of VAT repayments since registration and has claimed back £871,012.26 with £678,623.50 being reimbursed;
• During an investigation into The Liquidated Company’s VAT claims, HMRC reviewed invoices produced for the VAT repayments, the business, and personal bank statements provided by the Disqualified Director. HMRC were unable to verify the authenticity of the invoices provided and rejected claims totalling £192,388.76;
• Two creditors have confirmed that the invoices submitted to HMRC have been falsified;
• The Disqualified Director has failed to deliver up any books and records to support the VAT repayment claims made and as such £192,388.76 is outstanding at liquidation.

Case 47 – Director disqualification for HMRC offences and payments to connected parties

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

At a time when, based on the information available to me I now accept, The Insolvent Company’s The Insolvent Company Ltd (IC) was insolvent, between 08 March 2018 and the date of liquidation I caused IC to make net transfers totalling at least £116,469 to connected parties. During this period investors received £3,104 and HMRC did not receive any payment. Investors and HM Revenue & Customs (HMRC) were between them owed an estimated £1,719,716 when SCSH went into liquidation.

In addition to this, I prepared to transfer the freehold title of the building owned by IC to the Insolvent Company (IC), a company of which I was the only formally appointed director, after 08 March 2018 at a time when LC was insolvent. Whilst no transfer was ultimately achieved, and it was formally agreed with the liquidator that the documents prepared for the transfer were of no legal effect, an agreement was made to pay £30,000 towards IC costs. The planned transfer of the freehold therefore caused a loss to the liquidation estate of £30,000, to the detriment of the Investors’ and HMRC’s claims on the liquidation estate.

• Knowledge of Insolvency as at 08 March 2018
• Between 27 April 2017 and 24 January 2018 six County Court Judgments (CCJs) were issued against LC totalling £14,180.
• In January 2018 HMRC issued Regulation 13 Determinations totalling £301,521 in respect of tax years 2014/15 and 2015/16.
• Financial statements for SCSH filed at Companies House for the years ended 31 July 2016 and 31 July 2017 each show a deficit of Shareholders Funds of £136,305 and
• £28,670 respectively.
• At a meeting with a steering committee of investors on 23 February 2018 LC offered to pay reduced guaranteed returns. Returns were paid to investors at the reduced rate until this offer was ultimately rejected on 08 March 2018.
• Transactions after 08 March 2018
• Between 08 March 2018 and 12 November 2018 £237,407 was paid from LC bank account.
• Of this sum £62,705 was transferred to the Liquidated Company (LC2) and £47,002 was transferred to The Insolvent Company (IC2). Transfers received from LC2 and IC2 by LC during the same period totalled £20,013, therefore net transfers out to LC2 and IC2totalled £89,469. I was the sole director of LC2 and IC2 during this period.
• On 18 June 2018 LC made a payment of £17,000 to F which had the reference ‘L’. It is not known if this payment was made on behalf of LC or LC2.
• On 04 July 2018 LC made a payment of £10,000 to a connected party. The connected party attended the meeting with the Investors’ The Insolvent Companyeering Committee on 23 February 2018 and was said to represent ‘L Group’.
• Net payments made by LC to or on behalf of connected parties after 08 March 2018 totalled £116,469.
• No payments were made to HMRC after 08 March 2018. HMRC issued additional Determinations which resulted in a claim totalling £515,768 in LC liquidation.
• On 20 March 2018 LC made 3 payments totalling £3,104 to a single investor, which satisfied 2 of the CCJs which had been issued against LC. No other payments were made to any of the other investors after 08 March 2018. Investors’ claims in the liquidation are estimated to be £1,203,948.
• Claims by HMRC and the investors are estimated to total £1,719,716 out of total liabilities to creditors totalling £1,794,726.
• My planned transfer of the freehold property owned by LC after 08 March 2018 caused a loss to the liquidation estate of £30,000.

Case 48 – Director disqualification for HMRC / BBL offences

Director Disqualified for 10 years by a director signed undertaking.

The Director Disqualified caused the company to apply for a Bounce Back Loan BBL totalling £50,000 on the 14 May 2020 which he knew or ought to have known that the company was not eligible for in that the company had ceased trading on 22 December 2019. The £50,000 remains outstanding as at the date of liquidation.

• The Director failed to ensure that the company declared correct information to HM Revenue and Customs (HMRC) in that he under declared sales. HMRC therefore raised assessments totalling £171,542.
• HMRC commenced their investigation into the company following their visit on 14 November 2019 after inspecting the company’s records and discussing the general trading of the company.
• HMRC obtained supplier invoices showing additional company purchases that were not declared in the records provided.
• HMRC therefore raised assessments totalling £171,542 in respect of VAT, Corporation Tax and loss of profit for under declared sales/ turnover.
• HMRC did not receive any contact from The Banned Director disputing the figure of £171,542.

Case 49 – Director disqualification for VAT offences and concealing information to HMRC

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

The Company Director caused the Dissolved Company (DC) to suppress and conceal cash sales figures resulting in the submission of Value Added Tax (VAT) returns that under-declared the true sums owed, resulting in an underpayment of VAT, in that:

• On 25 May 2016, 28 July 2016, 30 September 2016, and 7 July 2017 HMRC carried out test eats at DC’s trading premises.
• During the test eats, HMRC observed poor cash handling practices and found errors in record keeping when reviewing DC’s books and records.

As a result, HMRC have made best judgement assessments which include:

o An assessment for £24,335 was issued for FYE 30/04/14.

o An assessment for £26,948 was issued for FYE 30/04/15.

o An assessment for £25,064 was issued for FYE 30/04/16.

o An assessment for £21,579 was issued for FYE 30/04/17.

o An assessment for £25,035 was issued for FYE 30/04/18.

o An assessment for £6,569 was issued for period 07/18.

In total, assessments were raised for £129,530. DC has made no payments in respect of this liability.

HMRC’s investigation concluded that the under-declaration of DC’s VAT liability was deliberate and concealed behaviour.

As a result of HMRC’s findings, a penalty totalling at least £71,231 has been applied for periods 07/13 to 07/18. DC has made no payments in respect of this liability.

HMRC have submitted a claim of at least £200,761 for VAT in the Liquidation.

Case 50 – Director disqualification for HMRC offences and under declaring turnover

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

Between 08 November 2012, at the earliest, to 31 March 2017, The Director Disqualified caused The Insolvent Company to under declare the turnover, purchases and wage costs of the business and consequently under declare and underpay Pay as You Earn (PAYE), National Insurance Contributions (‘NIC’), Value Added Tax (VAT) and Corporation Tax (CT) to the detriment of HM Revenue & Customs (HMRC). HMRC determined that The Insolvent Company under declared its PAYE for the years 2012/2013 to 2016/2017 (inclusive), under declared its VAT liability for quarters ended August 2014 to November 2016 (inclusive) and under declared its CT for the years 2012/2013 to 2015/2016 (inclusive). In that:

PAYE/NIC:

•  Following HMRC’s investigation it was determined that The Insolvent Company PAYE /NIC liability had been under declared on the returns submitted within the years ended 2012/2013 to 2016/2017 and an assessment was subsequently raised totalling £97,806.
•  On 02 February 2018 he signed a contract settlement agreeing to the repayment of a PAYE /NIC liability totalling £138,825, accounted for by the PAYE/NIC assessment of £97,806 plus interest and penalties.
•  The Director made no payments to reduce the PAYE/NIC liability as per the contract settlement dated 02 February 2018.

VAT:

• The Insolvent Company was initially registered for VAT from 01 May 2014. Following HMRC’s investigation, the VAT effective date of registration was revised to 01 July 2013.
•  The Insolvent Company submitted VAT returns for the quarters ended August 2014 to November 2016 (inclusive) with a combined VAT liability of £9,243, with surcharges during the period totalling £835. The Insolvent Company made payments to HMRC which serviced the original returns it submitted and associated surcharges.
•  Following HMRC’s investigation it was determined that VAT had been under declared on the returns for the quarters ended August 2014 to November 2016 and an Officer assessment was subsequently raised totalling £76,969, with corresponding penalties totalling £26,939 and interest of £4,893.
•  The Banned Director made no payments to reduce the increased VAT liability.
• Corporation Tax:

•  Following HMRC’s investigation it was determined that The Insolvent Company  CT liability had been under declared on the returns submitted within the years ended 2012/2013 to 2015/2016.  As a result of HMRC’s determination, assessments were raised for the years ended 2012/2013 to 2015/2016 totalling £82,284 with a corresponding deliberate inaccuracy penalty charge totalling £16,423.
•  From the date of incorporation to the date of liquidation, The Disqualified Director made payments totalling £5,159 to HMRC in respect of CT.
•  At the date of liquidation, The Director’s liability in respect of CT totalled £93,648 (including penalties).

Case 51 – Director disqualification for Misuse of moneys obtained, contrary to terms of BBL

Director Disqualified for 7 years by Order of the Court.

The Director Disqualified caused The Insolvent Company to misapply monies received in relation to a state backed Covid Support scheme, in breach of the terms of that lending, specifically that the moneys obtained were transferred and/or utilised to his benefit, in that:

•  He caused The Insolvent Company to apply to Lloyds Bank Plc for a Government backed Bounce Back Loan (BBL), in the amount of £50,000, on 07 May 2020;
•  the loan was received into The Insolvent Company account with the bank on 11 May 2020;
•  on 18 May 2020 he caused The Insolvent Company to transfer the sum of £40,000 to him by way of a loan repayment;
•  this transfer was in breach of the conditions of the BBL, which stated that it was only to be used for the economic benefit of the business and not for personal expenditure.
• Failure to Maintain and/or Preserve and/or Deliver up accounting Records

From 1 June 2020, he failed to ensure that The Insolvent Company maintained or preserved the accounting and administrative records or, alternatively, has failed to deliver up any that remain in existence. In that:

•  The accounting records which have been delivered up to the Liquidator are inadequate;
•  He has stated that all remaining records in existence when The Insolvent Company ceased trading were disposed of.
• As a consequence it is not possible to:
• Determine he full and true extent of trading;
• Determine the full and true extent of cash income and expenditures.
• Determine the full and true extent of moneys owed by, or to, him in relation to any director loan account, in particular in relation to transfers made to him totalling £45,000 following the receipt of a local council Covid Support grant and the BBL.
•  Determine the full and true amount due to HMRC in relation to taxation due on employment, personal benefits and trading activities.
•  Verify the cause of failure; and
•  Verify the accuracy of the Statement of Affairs.

Case 52 – Director disqualification for HMRC offences and trading to detriment of HMRC

Director Disqualified for 3 years by a director signed undertaking.

The Director Disqualified failed to ensure that The Insolvent Company complied with its obligations to make timely returns and payments to HM Revenue and Customs (HMRC) and, as a result, she caused the Company to trade to the detriment of HMRC from at least 22 April 2017 until the date of liquidation on 06 April 2021 with £142,524.03 (inclusive of interest) estimated as due. In that:

•  A total liability was incurred for VAT, Income Tax/National Insurance Contributions and Corporation Tax resulting in a claim in the liquidation by HMRC of £142,524.03.
•  A total VAT liability of £56,189.44 is outstanding. £12,918.97 in assessments for the VAT quarters May 2019 to May 2021 and £43,270.47 in underdeclared VAT for the quarters from November 2017 to February 2019.
•  No VAT payments were made by the Company after 14 July 2017.
•  A PAYE/NIC liability of £42,779.88 is outstanding for the tax years 2016/17, 2017/18, 2018/19, 2019/20 and 2020/21. No PAYE/NIC payments were made by the Company in the period from April 2017.
•  A Corporation Tax liability of £43,554.71, was incurred for the accounting period ending 31 August 2018.
•  Financial statements for the years ending 31 August 2017 and 2018 show the Company had total liabilities of £20,804 (all owed to HMRC) and £84,191 (£83,583 of which was owed to HMRC) respectively.
•  Analysis of the Company bank statements show in the period from 01 September 2018 to liquidation, a total of £1,044,669.70 was paid into the account, and £1,052,784.90 paid out. In the same period a total of £105,690.63 was directly transferred to her whilst £13,244.86 was paid to HMRC and £14,939.44 received in VAT repayments.
•  At liquidation, the company had total liabilities of £192,674.04 of which £142,524.03. is owed to HMRC and £50,000 in respect of a Bounce Back Loan. The largest asset in the liquidation is her overdrawn Directors Loan Account of at least £214,427.

Case 53 – Director disqualification for failing to maintain or preserve accounting records / BBL offences

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

The Company Director (The Company Director) failed to ensure that The Insolvent Company (IC) maintained adequate accounting records from 06 September 2019 to creditors voluntary liquidation on 25 November 2021 or alternatively if such records were maintained he failed to preserve and/or deliver up such records to the Liquidator. The absence and/or failure to deliver up the accounting records has had the following consequences:

•  The inability, to verify company income and expenditure between 06 September 2019 and 25 November 2021.
•  The inability to account for proceeds, of the sale of assets of £66,191 between 09 September 2020 and 25 November 2021.
•  The inability, to establish whether the company had any debtors owing money to the company.
•  The inability, to establish whether the company had any assets which have not been declared.
•  At Liquidation debts of £55,650 were owed including a debt of £2,650 to HMRC, £900 to Trade and Expense Creditors and £52,000 Bounce Back Loan.

Case 54 – Director disqualification for HMRC / VAT and PAYE offences

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

The Banned Director caused The Insolvent Company to trade to the detriment of Her Majesty’s Revenue & Customs (HMRC) in respect of Value Added Tax (VAT), Pay As You Earn tax (PAYE) & National Insurance Contributions (NIC) from at least 30 April 2018 until liquidation and a result at liquidation HMRC was owed at least £63,471.64. In that:

VAT:

• The Company filed a VAT return for the period ended 10/17 that declared a liability due to HMRC of £7,134.16. HMRC raised a corresponding surcharge in the sum of £1,070.12. Against these liabilities, the Company paid £4,003.56. At liquidation, the balance of £4,200.72 remained outstanding.
• The Company filed seven VAT returns for the periods ended 04/18, 07/18, 10/18, 01/19, 04/19, 07/19 & 10/19 that declared a total liability due to HMRC of £39,935.30. In the absence of payment HMRC raised five corresponding surcharges for the periods ended 04/18, 07/18, 10/18, 01/19 & 04/19 in the total sum of £4,337.83. The Company made no payments against these liabilities, which remained outstanding at liquidation.
• PAYE & NIC:

• For the tax year 2017/2018 the Company submitted monthly Real Time Information (RTI) for months 1  12 that declared total net liabilities due to HMRC of £10,703.16. Against this liability, an annual employment allowance of £3,000 was credited and payments totalling £4,733.61 were made. At liquidation, the balance of £2,969.55 remained outstanding.
• For the tax year 2018/2019 the Company submitted monthly RTI for months 1  12 that declared total net liabilities due to HMRC of £11,753.75. Against this liability, an annual employment allowance of £3,000 was credited. No payments were made by the Company. At liquidation, the balance of £8,753.75 remained outstanding.
• For the tax year 2019/2020 the Company submitted monthly RTI for months 1  6 that declared total net liabilities due to HMRC of £5,131.27. Against this liability, an annual employment allowance of £1,856.78 was credited. No payments were made by the Company. At liquidation, the balance of £3,274.49 remained outstanding.
• Comparative treatment of creditors/apportionment of income:
• Prepared accounts for the year ended 30 April 2018 show Corporation Tax of £4,154, other taxation and social security of £6,321 and other creditors of £19,167.
• Between 18 March 2019 and 10 October 2019, when the Company ceased trading, payments totalling £100,346.21 were made from the Company bank account, of which at least £28,069.76 was paid to individuals, £44,233.94 was paid out by cheque, and £NIL was paid to HMRC.
• At liquidation the submitted claims comprised of (i) HMRC – £68,547.27 and (ii) Bank – £14,644.43.

Case 55 – Director disqualification for HMRC / BBL offences and accounting document breaches

Director Disqualified for 7 years by a director signed undertaking.

On 03 June 2020, The Company Director caused The Dissolved Company (DC) to fraudulently breach the conditions of the Bounce Back Loan (BBL) Scheme by overstating annual turnover in order to obtain a larger loan of £50,000 when he knew or ought to have known that IZ was only eligible for a loan to a maximum of £21,125 based on the turnover in the 2018 and 2019 annual accounts.

Furthermore, between 03 June 2020 and 08 June 2020, The Company Director caused The Dissolved Company (DC) to fraudulently breach the conditions of the Bounce Back Loan (BBL) Scheme by applying for a second BBL of £50,000 when he knew or ought to have known that only one successful BBL application was permissible under the scheme. In the absence of sufficient and adequate accounting records being delivered up by The Company Director to the Liquidator it has not been possible to determine how all the £100,000 obtained has been expended and whether it was for the economic benefit of IZ.

Case 56 – Director disqualification for various HMRC offences

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

The Director Disqualified caused The Insolvent Company (the Company) to trade to the detriment of HM Revenue and Customs (HMRC) from at least 07 November 2018 until the date of liquidation on 27 October 2020 resulting in estimated liabilities due to HMRC at liquidation totalling £80,080.41 (inclusive of interest). In that:

• A total liability was incurred for VAT and Income Tax/National Insurance Contributions resulting in a claim in the liquidation by HMRC of £80,080.41.
• A VAT liability of £52,374.04 is outstanding for the quarters 09/2018 to 09/2020. The VAT due for the quarter ended 09/2018 should have been paid in full by 07 November 2018. The last payment made by the Company against the outstanding VAT debt was £2,028.16 on 12 March 2019 which was set-off against the liability for 12/2018 quarter.
• A PAYE/NIC liability of £11,459.22 is outstanding for the tax years 2018/19, 2019/20 and 2020/21. Against the PAYE/NIC liability due for the tax year 2018/19 of £9,532, £4,382 was paid leaving £5,150 outstanding which had accrued from October 2018 and which ought to have been paid in full by 22 May 2019. The last payment made by the Company against the outstanding PAYE/NIC debt was £3,000 received on 29 March 2019 which was set-off against the debt for the 2018/19 tax year.
• A Corporation Tax (CT) liability of £16,247.15, was incurred for the accounting periods ending 30/09/2018 and 30/09/2019.
• Financial statements for the years ending 30/09/2018 and 30/09/2019 show the Company had total liabilities of £40,974 (£16,369 owed to HMRC) and £48,714 (£27,695 owed to HMRC) respectively.
• Analysis of the Company bank statements show from 01 October 2019 to 20 October 2020 a total of £451,909.73 was paid into the bank account and £451,952.57 paid out. The bank statements show that no payments were made to HMRC in this period.
• At liquidation, the company had total liabilities of £89,114.93 of which £80,080.41 is owed to HMRC. The only asset in the liquidation is the overdrawn Directors Loan Account of £126,221.

Case 57 – Director disqualification for HMRC / BBL offences / lack of company records

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

Between 24 June 2020, the date a bounce back loan (BBL) is received and 05 August 2020, the date the BBL loan and pre-existing bank credit was expended, The Company Director (The Company 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 that: –

•  The bust company traded as an Indian restaurant from November 2018 to 7 March 2021 and she was the sole appointed director throughout.
•  On 24 June 2020 £50,000 was paid into The bust company account. At this date The bust company balance on its bank account increased to £72,922.
•  On 13 April 2021 wage records were delivered up to the Liquidator for the period 2019 to 2021.
•  On 22 November 2021 purchase invoices for the period November 2018 to December 2019 and weekly takings books for the period 07 October 2018 to 12 January 2020 were delivered up to the Liquidator.
• In the absence of adequate accounting records delivered up to the Liquidator for the period 24 June 2020 and 05 August 2020;
•  it has not been possible to verify if the £50,000 Bounce Back Loan (BBL) applied for on 23 June 2020 was utilised for the benefit of The Insolvent Company and in accordance with the Government’s terms and conditions of the Covid Support Measures.
•  On 25 June 2020, a payment totalling £20,000 is made to her bank account. It is not possible to verify the purpose of the payment and if this was legitimate expenditure of Caf.
•  On 25 June 2020, £10,000 is paid to an unknown recipient. It is not possible verify the purpose of the payment and if this was legitimate expenditure of Caf.
•  On 25 June 2020 a further £10,000 is paid to an individual. It is not possible verify the purpose of the payment and if this was legitimate expenditure of Caf.
•  On 30 June 2020 a payment of £7,000 is made and on 01 July 2020 a payment of £3,000 is made, the recipients of which are unknown. It is not possible to verify the purpose of these payments and if this was legitimate expenditure of Caf.
•  It is not possible to verify the purpose of the 9 cash withdrawals totalling £4,500 made between 29 June 2020 and 03 August 2020 and if this was legitimate expenditure of IC.”

Case 58 – Director disqualification for personal sale of land / trading to the detriment of creditors

Director Disqualified for 5 years by a director signed undertaking.

On 28 September 2017, at a time when he knew or should have known that The Insolvent Company was insolvent, The Disqualified Director caused The Insolvent Company to sell land to the Director’s personal pension fund, for which the net proceeds of sale were paid into the Disqualified Director’s personal bank account, to the benefit of the director and to the detriment of The Insolvent Company’s creditors.

• On 20 March 2017 The Insolvent Company submitted its VAT return for 01/17 and the corresponding VAT payment. No more VAT returns or payments were submitted.
• On 12 July 2017 The Director approved The Insolvent Company’s accounts for the year ending 31 October 2015 which showed that The Insolvent Company was insolvent with net liabilities of £145,184.
• The Insolvent Company made its last payment for PAYE on 17/08/17 whilst being in PAYE arrears for the tax years 2016/17 & 2017/18.
• On 30 August 2017 HMRC informed the Director that The Insolvent Company had VAT arrears of £49,552 and the VAT return for 04/17 was outstanding. On the same date, The Insolvent Company’s accountant discussed tax debts with HMRC and stated he would speak to The Director and call back.
• On 22 September 2017 HMRC carried out a distraint visit and left correspondence for The Disqualified Director regarding The Insolvent Company’s tax debts. This date was also the deadline for payment of VAT due for 07/17, assessed at £37,455, which was not paid.
• On 28 September 2017 land belonging to The Insolvent Company was sold to the trustees of The Director’s personal pension fund for £142,500. The Banned Director was one of the trustees.
• In accordance with instructions from The Director, solicitors acting for The Insolvent Company paid net proceeds of sale of £97,827 into The Director’s personal bank account.
• Between 28 September 2017, the date on which the land was sold, and 10 July 2018, the date of liquidation, The Banned Director paid net funds of £52,558 to The Insolvent Company’s bank account. The Director retained the benefit of £45,269 from the proceeds of sale.
• On 24 October 2017 The Insolvent Company made an offer to pay its tax debts by instalments which was rejected by HMRC as previous payment plans had not being maintained.
• The Director consulted insolvency practitioners who telephoned HMRC on 30 November 2017 to advise that The Insolvent Company was considering whether to pay HMRC or enter into liquidation.
• The Insolvent Company ceased trading in February 2018.

• HMRC served a winding up petition on The Insolvent Company on 16 April 2018.
• On 20 June 2018 The Banned Director sought advice from insolvency practitioners.
• The Insolvent Company entered into liquidation on 10 July 2018.

Case 59 – Director disqualification for BBL offences

Director Disqualified for 5 years by a director signed undertaking.

The Disqualified Director caused The Liquidated Company to apply for a Bounce Back Loan (BBL) of £50,000 on 13 May 2020 using overstated turnover figures in the application form. Consequently, The Liquidated Company received more monies than it was entitled to from the BBL scheme, in that:

•  On 13 May 2020 The Liquidated Company obtained a BBL of £50,000 which it was not entitled to. 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 Liquidated Company’s turnover was stated as £200,000.
•  Accounts submitted to Companies House show that The Liquidated Company’s income for the YE 30.09.2016 was £50,110, in YE 30.09.2017 was £86,219 and in in YE 30.09.2018 was £88,770.
•  Bank Records show The Liquidated Company’s income between 06 March 2019 and YE 30.09.2019 was £75,922.71, in YE 30.09.20 it was £74,665 and in YE 22.03.21 it was £44,400.
•  Bank Records show in calendar year 2019 The Liquidated Company generated an income of £92,228 allowing a BBL of £23,000. As a result The Liquidated Company received £27, 000 more than it was entitled to under the BBL scheme.
•  On 22 May 2020 The Liquidated Company used the BBL to repay a third-party loan for which the directors held guarantees of £47,330.

On 22 March 2021 The Liquidated Company entered liquidation with total liabilities of £63,641, of which £43,632 was the BBL.

Case 60 – Director disqualification for PAYE / NIC and Corporation tax offences

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

The Disqualified Director failed to ensure that The Insolvent Company complied with its statutory obligations to make payments when due to HM Revenue & Customs (‘HMRC’) for PAYE/NIC, VAT and Corporation Tax (‘CT’). As a consequence he caused The Insolvent Company to trade to the detriment of HMRC from at least 01 February 2017, to its cessation in October 2018, resulting in at least at least £158,162 being due to HMRC in unpaid taxes. In that:

•  PAYE/NIC of £65,336 was due for the tax year 2015/16 which should have been settled by 22 April 2016, however a balance of £24,246 remains outstanding for this year;
•  Further amounts accrued in the following years and the last substantive payment was made on 21 February 2017, which was allocated to 2016/17;
•  At the liquidation date a total of £106,670 was outstanding for PAYE/NIC deducted but not paid to HMRC;
•  VAT of at least £33,736 was due at the liquidation date, dating from the quarter to April 2017, which was only part-paid;
•  In addition CT of £17,756 was owed for the financial year to 31 January 2016, after allowable losses in the following year;
•  Accounts to 31 January 2017 show trade and expense creditors of £119,504, by the liquidation date such creditors were owed £127,574;
•  HMRC were owed £110,441 in January 2017 and has claimed £168,175 in the liquidation;
• Bank statements show payments of £1,102,984 from 01 February 2017, of which £68,409 was paid to HMRC.

Case 61- Director disqualification for HMRC / BBL offences / lack of company records

Director Disqualified for 7 years by Order of the Court.

The Director Disqualified caused The Insolvent Company (IC) to apply for Bounce Back Loans (BBL) of £15,000 and £10,000 on 8 May 2020 and 12 November 2020 respectively and failed to ensure the funds were used in their entirety for the economic benefit of IC, in that:

• Following the payment of the BBL of £15,000 on 8 May 2020, The Director paid £1,500 to himself within 3 days, and £8,300 to a connected company within 5 days, with the remaining funds being paid to the company accountant. He has provided no company records to demonstrate that any of the £9,800 related to IC business payments.
• Following the receipt of the top up BBL of £10,000, within a period of 12 days, The Director had paid £9,879 to a connected company.
• The Banned Director has advised that the payments to the connected companies were for the purpose of building up those companies for family, and has provided no evidence that these were for the economic benefit of IC.
• On 31 May 2021 IC entered liquidation with liabilities of £25,000 owed for the BBL.

Case 62 – Director disqualification for Bounce Back Loan offences & Section 1006 offences

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

On 01 July 2020 The Company Director caused The Insolvent Company (IC) to breach the terms of the Bounce Bank Loan (BBL) scheme by applying funds totalling £20,000 for his personal benefit and not for the economic benefit of IC and without the intention to complete timely repayments in the future resulting in loss to the bank of £20,000, and failed to give notice to the bank of the dissolution of the company as required by Section 1006 Companies Act 2006:

• 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.
• GEH received a BBL of £20,662 on 26 June 2020
• On 1 July 2020 a payment of £20,000 was made from IC bank account to the personal account of The Company Director
• On 20 July 2020, The Company Director applied to dissolve IC
• As of 20 July 2020, the full amount of the BBL remained outstanding
• IC failed to given notice to the bank of its application for dissolution as required under Section 1006 of the Companies Act 2006

On 13 October 2020 IC was dissolved and the BBL of £20,662 remains outstanding

Case 63 – Director disqualification for two false Bounce Back Loan applications

Director Disqualified for 7 years by Order at trial.

The Disqualified Director caused The Insolvent Company Limited to fraudulently apply for two Coronavirus Business Interruption Loans (CBILs) by providing false documents to the lenders, in that:

•  In May 2020, on behalf of the company, The Director applied for and obtained a CBILs loan from a lender in the amount of £90,000. The company application was supported by false bank statements, for the period January to February 2020, which showed an increased turnover through the company account of £436,154.
•  In August 2020, on behalf the company, The Director applied for, and obtained, a CBILs loan in the amount of £150,000 from a second lender. The company application was supported by false bank statements, for the period March to September 2020, which showed an increased turnover through the company account of £1,662,614.
•  The terms of the Coronavirus Business Interruption Loan Scheme (CBILS) were breached by failing to use the second loan of £150,000 in August 2020 and to use some of those funds to repay the existing CBILs of £90,000 obtained in May 2020.

Following the liquidator’s appointment on 1 April 2021, The Disqualified Director failed to deliver up the accounting records for BWDSL or in the alternative failed to maintain and/or preserve accounting records, which were adequate to explain the trading and financial position of BWDSL between 1 July 2019 and liquidation. As a consequence it has not been possible to account for the following:

• The position regarding the company’s income:
•  Company bank statements for the period 1 July 2019 to 15 March 2021 reveal income in the sum of £950,562. In the absence of company accounting records it is not possible to determine if these amounts area true reflection of the turnover achieved during the period of trading.
• The position regarding the company’s expenditure:
•  Company bank statements for the period 1 July 2019 to 15 March 2021 reveal expenditure in the sum of £961,666 of which £77,375 was paid to connected parties. In the absence of company accounting records it is not possible to determine if these amounts were expended for the benefit of the company.
•  On 21 August 2020 the company received a CBIL in the sum of £150,000. On 24 August 2020 £24,375 was paid to a former director of a connected company. In the absence of accounting records it is not possible to determine if these funds were used for the benefit of the company.
•  On 22 May 2020 the company received a CBIL in the sum of £90,000. On 24 May 2020 £14,000 was paid to The Director. On 27 May 2020 £46,000 was paid to a former director of a connected company. In the absence of accounting records it is not possible to determine if these payments were used for the benefit of the company.
• The position regarding the company assets
•  The company filed accounts to 30 June 2019 which disclosed fixed assets totalling £229,160. In the absence of company accounting records it is not possible to determine if these assets have been disposed of for the benefit of the company and its creditors.
•  The inability to verify/substantiate the level of remuneration paid to The Director and the amounts owed to, or owed by The Banned Director in respect of any director’s loan account.

Case 64 – Director disqualification for breach of FSMA 2000 and detriment to clients

Director Disqualified for 9 years by Court Order.

The Director Disqualified caused The Insolvent Company (The Insolvent Company) to trade from 10 April 2018 to 29 November 2018 with a lack of commercial probity whilst in breach of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and to the detriment of its clients, in that:

•  Under Article (5)(1)(b) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 The Insolvent Company’s business of accepting deposits from members of the general public (the clients) was a non-exempt Regulated Activity that was required by Section 19 of the Act to be authorised by The Financial Conduct Authority (FCA). No such authorisation was obtained.
•  In the period from 10 April 2018 to 4 October 2018 The Insolvent Company received deposits from its clients totalling at least £808,000 which The Insolvent Company represented would be forwarded directly on receipt to a prime broker to be traded, with guaranteed returns to those clients of 6% per annum paid monthly.
•  The Insolvent Company’s records disclose only £188,775 funds deposited by investors being forwarded to prime brokers, which generated losses. Rather than being invested in equities or forex trading as had been represented, the balance of monies was used to finance the administration of the company and make payments to himself of at least £118,450 and, in the absence of investment income being received, to fund payments to other clients on account of their promised returns.
•  At the liquidation sums due to clients amounted to at least £977,948 and assets in The Insolvent Company’s name to satisfy those liabilities totalled no more than £230,000.

He failed to ensure The Insolvent Company maintained and/or preserved adequate accounting records or he failed to deliver up such records in the liquidation. As a consequence it is not possible to:

•  Determine the purpose and recipient(s) of cash drawings totalling £60,559
•  Verify the purpose of card and PayPal expenditure totalling £47,546
•  Verify the purpose of payments to named individuals totalling £150,004
•  Determine the amount due to The Insolvent Company by him on his loan account
•  Determine whether or not any monies were due to HMRC
•  Determine what sensitive and other personal data of clients was collected by The Insolvent Company and
•  Whether or not The Insolvent Company at all times complied with the Data Protection Acts 1998 and 2018 and the General Data Protection Regulation as to the security, retention and destruction of such data.

Case 65 – Director disqualification for trading to the detriment of HMRC

Director Disqualified for 3 years by a director signed undertaking.

The Director Disqualified caused JLA The Insolvent Company (IC) to trade in contravention of the terms of a CVA dated 20 November 2019 and to the detriment of HM Revenue and Customs (HMRC) by failing to make payments as and when they fell due in respect of PAYE and NIC from 22 December 2019 and in respect of VAT from at least 07 June 2020 to 21 June 2021 (the date of the liquidation). In that:

CVA

•  On 20 November 2019, IC entered a Company Voluntary Arrangement (CVA) with its creditors. Total creditors in the CVA were £60,789, of which £24,955 was owed to HMRC.
• It was a requirement of the CVA that IC made payments for all future tax liabilities on or before the due date.

PAYE/NIC

•  HMRC ledgers show that between 22 December 2019 (when the PAYE return for November 2019 became due for payment) and 21 June 2021, when IC went into liquidation, returns were submitted to HMRC showing a total liability of £50,015.
•  HMRC Ledgers show that no payments were made in respect of this liability. Employee Allowances amounting to £6,553 were set against this liability, leaving a balance due of £43,462.
•  HMRC’s claim in the liquidation details a total PAYE/NIC liability of £43,426, there is currently no explanation for the slight differential in amounts.

VAT

•  According to HMRC ledgers, VAT returns submitted to HMRC for the quarters ended 30 April 2020, 31 July 2020 and 31 October 2020 (and due for payment from 07 June 2020 onwards) detail an amount due to HMRC of £37,537.
•  HMRC Ledgers show that no payments were made in respect of these liabilities, but HMRC have deducted the sum of £2,070 from the total due to a repayment return of this amount being submitted for the quarter ended 31 January 2021, leaving a balance due of £35,467.
•  HMRC’s claim in the liquidation details a total VAT liability of £80,430. £23,714 relates to assessments raised after the company ceased to trade, and therefore these have not been included for the purpose of this allegation, and the balance of £21,249 relates to VAT included in the CVA.

DETRIMENTAL TREATMENT

•  From 30 December 2019 to 21 June 2021, IC bank statements show net payments made from IC’s bank accounts of £630,103. Two payments totalling £976 were made to HMRC in the same period.
•  IC total creditors at the date of liquidation were £182,904, comprising of HMRC £126,513 (of which £24,955 relates to debts included in the CVA (CVA debts), financial institutions £33,423 (of which £17,672 relates to CVA debts) and trade and expense creditors of £22,968 (of which £18,161 relates to CVA debts).
•  On 12 March 2021, the Supervisor of the CVA (the Supervisor) served notice of breach of the CVA on IC as the company was over three months in arrears in respect of the agreed payments.
•  On 18 June 2021, the Supervisor petitioned for a winding up order to be made against IC and on 21 June 2021, a winding up order was made.

Case 66 – Director disqualification for misuse of client money / delivery up of company records

Director Disqualified for 3 years by a director signed undertaking.

The Director Disqualified caused or allowed the Liquidated Company or the company to misuse money belonging to clients in breach of the contracts with those clients, in that:

• The company’s contracts with clients stated that the company would open a ‘Designated Bank Account(s)’ on behalf of the client in the name of the property which was the subject of the contract. The contracts authorised the company to make payments in respect of the subject property from the Designated Bank Account(s) without referral to the client, subject to a specified limit.
• Between 21 December 2018 and 16 January 2019, payments totalling £68,277.67 were made to HMRC from client accounts towards various of the company’s tax liabilities, including VAT, PAYE and Corporation Tax. No evidence has been provided that these payments were authorised by the clients whose monies were used.
• On 1 May 2020 the Liquidator was notified that a former client was making a claim against the company for £31,816.06 which was paid out of its client account by the company without proper authorisation. This sum included payments of £6,300 made to HMRC in respect of the company’s PAYE liabilities, £20,304.38 to a contractor in settlement of an invoice owed by a different client and in respect of a different property, and £5,211.68 to the company’s main bank account via a ‘general’ client account.
• Another former client has also made a claim against the company in respect of a shortfall of £65,188.46 in its client account

The Banned Director failed to ensure that The Liquidated Company maintained, preserved and/or delivered up adequate books & records between 5 March 2018 and 5 February 2020, in that:

• Between 2 May 2018 and liquidation 35 payments of client money totalling £64,437.50 were made by the company into its main company bank account. The payments did not include an invoice number as a reference and no other records in relation to these payments have been delivered up. As a result, it is not possible to establish the purpose of these payments and whether these sums were legitimately owed to The Liquidated Company
• Between 5 March 2018 and liquidation 23 cheques were issued by the company from the main company bank account totalling £33,624.94 for which it has not been possible for the Liquidator to ascertain the recipients of these funds or the purposes of the payments. As a consequence it has not been possible to verify whether the payments were legitimate company expenditure

The Banned Director failed to ensure The Liquidated Company complied with its statutory obligations to HMRC in respect of VAT between August 2014 and liquidation, in that:

• The company registered for VAT on 28 May 1975.
• From the periods ending June 2014 to liquidation the company did not file any returns in respect of VAT, and accordingly HMRC raised assessments for those periods
• HMRC issued winding up petitions in respect of unpaid tax liabilities on 2 October 2014, 12 November 2018, 21 October 2019 and 5 February 2020. In respect of the winding up petitions presented on 2 October 2014, 12 November 2018 and 21 October 2019, payments were made to HMRC on behalf of The Liquidated Company which caused the winding up petitions to be dismissed. In the case of at least the 2018 and 2019 petitions these payments were made with funds from client accounts operated by The Liquidated Company.
• On 3 September 2019, HMRC conducted an investigation into the VAT affairs of the company. This resulted in additional VAT assessments of £78,232.00 being raised, along with interest of £4,495.79.
• At liquidation, HMRC’s claim in respect of VAT was £156,539.84, comprising of unpaid tax of £117,527, surcharges of £15,200.70, penalties of £18,003 and interest of £5,809.14
• In the period 21 December 2018 to liquidation, the only payments made towards The Liquidated Company’ VAT liability were made from funds held in client accounts belonging to customers of The Liquidated Company and were made in response to winding up petitions presented by HMRC against The Liquidated Company. These payments totalled £40,523.42, of which £29,670.35 was allocated to the company’s VAT liability and the balance was allocated to the company’s outstanding The Liquidated Company Corporation Tax liability.

Case 67 – Director disqualification for misuse of client money / delivery up of company records

Director Disqualified for 10 years by a signed undertaking of the director.

On or around 13 June 2020 The Director Disqualified caused The Liquidated Company to breach the terms of the Bounce Bank Loan (BBL) scheme by applying for a Bounce Back Loan of £31,500 when she knew or ought to have known that The Liquidated Company was not eligible for the loan, with the funds being paid to her personally or used for her personal benefit rather than for the economic benefit of The Liquidated Company. In that:

•  To be eligible for a Bounce Back Loan, The Liquidated Company was required to have been engaged in trading or commercial activity at 01 March 2020 and at the date of application. The Liquidated Company trading ceased in April 2020 having lost its sole contract in April 2020. The Liquidated Company bank statements show the last inward customer payment was on 28 April 2020.
•  The BBL agreement was signed by her on 13 June 2020 and the BBL funds were paid into The Liquidated Company bank account on 15 June 2020.
•  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.
•  Between 18 June 2020 and 25 July 2020 all of the £31,500 BBL funds were transferred to her or used for her personal benefit.
•  On 25 July 2020 an electronic striking off application signed by her was filed at Companies House.
•  As of 25 July 2020, the full amount of the BBL remained outstanding.

 On 20 October 2020 The Liquidated Company was dissolved and the BBL of £31,500 remains outstanding.

Case 68 – Director disqualification for S221 Company Act company record offences and Bounce Back Loan abuse

Director Disqualified for 6 years by a director signed undertaking.

From 01 December 2019 to liquidation on 04 October 2021 The Company Director failed to ensure that The Insolvent Company maintained proper accounting records as required by Section 221 of the Companies Act 1985, or in the alternative, failed to preserve and deliver up to the Liquidator such records as were maintained. As a result, it is not possible to ascertain or verify:

•  The reason for payments totalling £130,671.43 received into the company bank account between 06 December 2019 and 04 December 2020 and whether it represents genuine business income.
•  The reason for payments between 02 December 2019 and 04 October 2021 totalling £133,846.41 and whether they represent genuine business expenditure.
•  The reason for the payment of £14,141.60 on 22 June 2020 to a third party company and whether this represents genuine business expenditure.
•  The reason for payments totalling £41,629.00 to an account said to belong to him.
•  Whether all income and expenditure has been accounted for correctly to HMRC.
•  Whether he was eligible for the £8,587.20 that he claimed for himself under the Corona Virus Job Retention Scheme from HMRC.

He applied for a government backed Bounce Back Loan (BBL) and failed to use the BBL for the economic benefit of the company in that:

•  On 15 July 2020 the company received £20,000 BBL from Barclays Bank.
•  On 15 July 2020 the full BBL of £20,000 was transferred to another bank account, said to be a personal account belonging to him.
•  He stated to the Liquidator that this was money owed to him for a van purchase, wages owed to him and personal debt he had got in to.
•  He has failed to provide any evidence to support the reason for this payment to himself.
•  He has failed to use the BBL for the economic benefit of the company, instead he has used the BBL for the economic benefit of himself.

 The company went into liquidation on 04 October 2021 owing £20,394.34 to HMRC in respect of VAT and CIS and £25,000 to Barclays in respect of the BBLs.

Case 69 – Director disqualification for HMRC, CIS, VAT and PAYE offences

Director Disqualified for 7 years by Order of the Court.

The Director Disqualified failed to ensure The Insolvent Company (IC) filed Construction Industry Scheme returns (CIS) on time for the tax years 2015/2016, 2016/2017, 2017/2018 and 2018/2019, as a result, HMRC issued Regulation 13 determinations totalling £333,864. Further, she caused OSS to trade to the detriment of HMRC from 08 January 2018 (when Value Added Tax (VAT) liabilities for the VAT quarter ended 11/17 fell overdue for payment) and from 22 January 2019 (when Pay As You Earn (PAYE)/National Insurance Contributions (NIC) and CIS liabilities for the month ended 05 January 2019 fell overdue for payment) until OSS was placed into liquidation on 12 August 2019.

Case 70 – Director disqualification for failure to maintain and deliver up of company records

Director Disqualified for 5 years by a director signed undertaking.

The Company Director failed to ensure that The Insolvent Company (IC) maintained and / or preserved adequate accounting records, or in the alternative following the Liquidator’s appointment on 26 August 2021, failed to deliver up the accounting records which were adequate to explain the trading and financial position of IC between 1 June 2020 and liquidation to the Liquidator. Consequently it has not been possible to:

•  Establish the true position with regard to the company’s income for the period 1 June 2020, the day after the annual accounting period ending 31 May 2020 and 6 July 2021, the date of Liquidation
•  Analysis of the company bank account 80936383 shows total credits of £282,929 comprising £44,822 in cash; £25,775 from him; £7,500 in a BBL top up, £5,000 in a Local Authority Covid Grant; £7,496 from an additional account in the name of the company for which we have been unable to obtain further details and £67,020 in unknown payments
•  There was also £29,320 in returned direct debit and standing order payments during this time.
•  Establish the true position with regard to the company’s expenditure for the period 1 June 2020, the day after the annual accounting period ending 31 May 2020 and 6 July 2021, the date of Liquidation
•  Analysis of the company bank account 80936383 shows total debits of £320,629 comprising £24,396 in cash; £104,457 paid to him; £102,677 paid to trade and expense; £11,737 in employee wages; £37,165 to an additional account in the name of the company for which we have been unable to obtain further details and £30,712 in unknown payments.
•  Establish the true position with regard to the use of the Government assisted Coronavirus Business Bounce Back Loan of £35,000 paid on 6 May 2020, top up of £7,500 paid on 17 November 2020 and a Local Authority Covid Grant of £5,000 paid on 15 April 2021 and whether or not this was used for the economic benefit of the business.

Case 71 – Director disqualification for Bounce Back Loan abuse and failing to deliver up company records

Director Disqualified for 11 years by a director signed undertaking.

The Director Disqualified caused The Liquidated Company Limited to wrongly apply for and obtain a Bounce Back Loan (BBL) of £50,000 at a time when there is no evidence that The Liquidated Company was trading and when he knew or ought to have known that The Liquidated Company was not eligible for that loan because it did not meet the turnover requirements for the BBL scheme. Further, The Banned Director has failed to provide accounting records evidencing that BBL funds totalling £43,134 were used for the economic benefit of The Liquidated Company, which was a requirement of the BBL scheme, in that:

1. On 14 July 2020, The Director applied for a BBL of £50,000 on behalf of The Liquidated Company. In the BBL application form, The Banned Director declared that The Liquidated Company’s turnover in the calendar year 2019 was £244,000.
2. The BBL scheme allowed businesses affected by the Coronavirus pandemic to apply for a government backed loan of between £2,000 and £50,000, up to a maximum of 25% of turnover in the calendar year 2019.
3. No sales invoices have been delivered up to the Liquidator. However, total customer receipts into The Liquidated Company’s bank account in the calendar year 2019 were £7,281. The last customer receipt shown in the bank statements was on 11 September 2019. The Director has failed to provide evidence that The Liquidated Company continued to trade after that date.
4. This was below the turnover level of £8,000 that was required to obtain the minimum BBL of £2,000 and so The Liquidated Company was not eligible for the BBL scheme.
5. On 11 September 2020, following £50,000 credited to The Liquidated Company’s bank account in respect of the BBL the total balance of the account was £50,000.
6. Between 13 September 2020 and 15 September 2020, following receipt of the BBL funds, The Director received payments from The Liquidated Company totalling £19,700. The Disqualified Director stated that he was owed this money by The Liquidated Company, but he has failed to provide any evidence in support of that. Consequently, it has not been possible to verify that the payments made to The Director were for the economic benefit of The Liquidated Company.
7. Between 13 September 2020 and 10 December 2020, The Liquidated Company’s bank statements show cash withdrawals totalling £22,045. The Director has stated that the cash was used for business expenses. The Director has provided receipts and purchase invoices dated between 28 September 2020 and 09 December 2020 showing payments for property repairs and improvements totalling £17,914. The Director has stated that The Liquidated Company traded as a serviced apartment provider.
8. However, abbreviated accounts filed at Companies House for the year ended 31 December 2019 and approved by The Director on 16 November 2020 state that The Liquidated Company had no assets. The Statement of Affairs signed by The Director on 21 April 2021 listed the only asset to be cash at bank. There is therefore no evidence that The Liquidated Company had any leasehold, freehold or any financial interest (whether by legal title or beneficial interest) in any properties.
9. The Director has failed to provide any evidence of any contract or other agreement requiring The Liquidated Company to pay for property repairs and improvements on properties in which The Liquidated Company did not have an interest. In the absence of any such evidence, it has not been possible to verify that the cash withdrawals of £22,045 were used for the economic benefit of The Liquidated Company.
10. Between 17 September 2020 and 26 October 2020, The Liquidated Company’s bank statements show further payments out of the bank account totalling £1,389. No evidence has been provided showing that these payments were for the economic benefit of the company.
11. The bank statements show that £6,766 was paid to the liquidator in March 2021 and the balance on the bank account at the date of liquidation was £100.
12. On 24 April 2021, The Liquidated Company went into liquidation.
13. According to the Statement of Affairs dated 21 April 2021, £50,000 remained outstanding at that time in respect of the BBL.

Case 72 – Director disqualification for HMRC and taxation offences

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

Between 20 April 2018 and the cessation of trade on or around 27 April 2020 (the period), The Director Disqualified failed to ensure that The Insolvent Company complied with its obligation to file statutory returns and remit monies due to HM Revenue & Customs (HMRC) in respect of VAT. The Banned Director caused or allowed The Insolvent Company to trade to the detriment of HMRC in respect of VAT in the period, by failing to make payments to HMRC when due whilst continuing to make payments to The Insolvent Company’s other creditors, with the result that at least £83,972 was owed to HMRC in respect of VAT at liquidation on 22 March 2021, in that;

VAT

• Professionally prepared Year-End accounts for 31 March 2018 record that The Insolvent Company’s turnover was £87,678, which exceeded the VAT threshold of £85,000 in that year.
• The Insolvent Company was voluntarily registered for VAT by the company accountant on 20 April 2018 and therefore the company was required to account for its VAT from that point.
• After The Insolvent Company had been registered for VAT, information from HMRC shows that The Insolvent Company should have submitted a return no later than 07 September 2018.
• Draft accounts for Year-End 31 March 2019 record that The Insolvent Company’s turnover was £265,585, which exceeded the VAT threshold of £85,000 in that year.
• From 20 April 2018, The Director failed to ensure that The Insolvent Company submitted VAT returns and as a result, HMRC were unaware of the growing VAT liability which has been calculated by the company accountant, using The Insolvent Company’s own records as being £83,972 between 20 April 2018 and 27 April 2020.
• The Insolvent Company made no payments to HMRC in respect of its VAT liabilities which has resulted in an estimated £83,972 owed at liquidation.

Discriminatory Treatment.

• Between 20 April 2018 and 27 April 2020 income into The Insolvent Company’s bank account totalled £738,781. Payments out of The Insolvent Company’s bank account totalled £738,775 including £358,190 to employees, £207,143 as company expenses, £72,468 to trade creditors and £87,689 (inclusive of £46,078 recorded as wages) to The Director Disqualified and by comparison £5,328 was paid to HMRC towards the Corporation Tax and no payments were made towards VAT.
• The Insolvent Company’s professionally prepared accounts for the year ending 31 March 2018 record creditors comprising of £2,013 owed to trade and expense creditors, £6,796 owed to HMRC and NIL owed to The Director.
• The Insolvent Company’s professionally prepared draft accounts for the year ending 31 March 2019 record creditors comprising of £2,500 owed to trade and expense creditors, £45,126 owed to HMRC and NIL owed to The Director.

At liquidation The Insolvent Company had liabilities outstanding of £18,060 to trade creditors, £2,500 to Mr. The Director and £83,972 to HMRC in respect of VAT.

Case 73 – Director disqualification for HMRC and taxation abuse

Director Disqualified for 4 years by a director signed undertaking.

The Director Disqualified caused The Insolvent Company (the Company) to trade to the detriment of HM Revenue and Customs (HMRC) from at latest 07 July 2018 in respect of Value Added Tax (VAT) and from at latest 22 March 2019 in respect of Pay As You Earn (PAYE/NIC) resulting in estimated liabilities due to HMRC at Liquidation totalling at least £169,210.94. In that:

•  A VAT liability of £111,577.66 is outstanding from the May 2018 quarter.
•  The last payment made by the Company against the outstanding VAT debt was £12,000 on 23 November 2019 which was set-off against the November 2017 and May 2018 quarters.
•  A PAYE/NIC liability of £57,633.28 is outstanding for tax years 2018/2019, 2019/2020 and 2020/2021 including interest of £474.74 outstanding for tax year 2018/2019.
•  The last payment made by the Company against the outstanding PAYE/NIC debt was £4,200.00 received on 02 January 2020 which was set-off against the debt for the 2018/2019 tax year.
•  Financial statements for the year ending 31 July 2018 show total liabilities of £67,165 with £44,693 owing to HMRC and £22,472 owing to other creditors.
•  Analysis of the Company bank statements show £641,201.23 being paid into the accounts in the period 01 August 2018 to 29 May 2020, the date of liquidation, and £658,933.65 being paid out of the accounts in the same period. The bank statements show £92,781.87 being paid to HMRC in that period, the last payment being on 02 January 2020.

 At liquidation, the Company had total liabilities of £187,301.91 of which £169,210.94 is owed to HMRC.

Case 74 – Director disqualification for VAT and CIS tax issues and trading to the detriment of HMRC

Director Disqualified for 14 years by an undertaking agreed by the director.

Between 01 August 2018 and 27 February 2020 (date of administration), The Director Disqualified failed to ensure that The Insolvent Company submitted accurate VAT returns and make payments to HM Revenue and Customs (hereinafter referred to as HMRC) as and when they fell due. In respect CIS taxes, The Insolvent Company failed to make payments as and when they fell due, meaning that The Insolvent Company traded to the detriment of HMRC so that when entering administration, The Insolvent Company had an outstanding liability in respect of VAT of £57,927.83 and in respect of CIS of £75,744.49.

VAT

• On 10 December 2018, a payment of £10,367.55 was made to cover VAT liabilities for period 09/18. Following this payment, The Insolvent Company’s VAT liabilities were nil.
• A VAT return was submitted on 24 January 2019 for period 12/18 for a total of £16,466.58. Due to non-payment, HMRC applied surcharges of £2,469.98. No payments were made towards this liability.
• A VAT return was submitted on 30 April 2019 for period 03/19 reclaiming £5,860.47. This credit was applied by HMRC to period 12/18.
• An assessment was raised on 17 July 2019 for £23,611.79 (including interests of £1,184.79) for underdeclared VAT returns for periods 06/17, 09/17, and 12/17. No payments were made towards this liability.
• A VAT return was submitted on 05 August 2019 for period 06/19 for a total of £18,201.34. Due to non-payment, HMRC applied charges and interests of £2,923.89. No payments were made towards this liability.
• A final VAT return was submitted on 29 October 2019 for period 09/19 for a total of £500.80. Due to non-payment, HMRC applied interests of £209.48. No payments were made towards this liability.
• On 06 February 2020 charges of £595.56 were withdrawn by HMRC. This credit was applied to period 12/18 resulting in VAT liabilities when entering administration of £57,927.83.

CIS

• On 31 July 2018, The Insolvent Company’s outstanding balance in respect of CIS was £39,842.60
• Between 01 August 2018 and 31 December 2019, with the exception of September 2019, The Insolvent Company submitted 16 CIS returns totalling £42,894.09. No payment was made towards this liability.
• Due to non-payment, HMRC applied surcharges of £334.30. Meaning the liability owed in respect of CIS was £83,070.99. No payment was made towards this liability.
• On 19 January 2019 The Insolvent Company submitted an employment allowance claim of £7,326.50. This credit was applied by HMRC to the CIS outstanding balance, resulting in CIS liabilities when entering administration of £75,744.49.

Comparative treatment

Review of bank statements between 01 August 2018 and 27 February 2020 show The Insolvent Company received income of £1,126,080.15. During the same period, £1,311,691.83 was paid out of The Insolvent Company’s bank account of which £30,997.91 was paid to HMRC.

Case 75 – Director disqualification for inadequate accounting records / delivery up of company records

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

The Disqualified Director failed to ensure that The Insolvent Company maintained and/or preserved adequate accounting records from 01 February 2018 through to Liquidation on 06 July 2021. Or in the alternative, following the liquidation failed to deliver up such records as and when required to do so.

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

• The true purpose of payments totalling £103,350 to the co-director between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £91,823 to The Banned Director between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £18,047 to connected companies between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £114,840 to various unidentified recipients from the The Insolvent Company bank account between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £94, 810 to various retail type establishments between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £19,641 towards apparent personal retail and subscription services between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of cash withdrawals totalling £24,106 between 01 January 2019 and 01 February 2018 and 06 July 2021 and whether these withdrawals were applied towards bona fide business transactions.
• The true purpose of payments totalling £76,624 to various automotive related businesses between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The true purpose of payments totalling £9,450 to various travel and accommodation providers between 01 February 2018 and 06 July 2021 and whether these represent bona fide business transactions.
• The company’s true liability to HM Revenue & Customs considering their claim in the liquidation of £77,062 regards Pay as You Earn (PAYE) and National Insurance Contributions (NIC).
• The company’s true liability to HM Revenue & Customs considering their claim in the liquidation of £8,025 regards Value Added Tax (VAT).
• The true level of assets held by the company and the extent to which the IP has been hampered in realising any potential recoveries for creditors.
• The true level of company debtors and the extent to which the IP has been hampered in realising potential recoveries.

Case 75 – Director disqualification for non payment of VAT and corporation tax

Director Disqualified for 10 years by a signed undertaking of the director.

The Director Disqualified failed to ensure that The Insolvent Company complied with its statutory duties to pay VAT and Corporation Tax (CT) due to HM Revenue and Customs (HMRC) and caused The Insolvent Company 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

• The Insolvent Company 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).
• The Insolvent Company 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.
• DCC 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.

 The Insolvent Company had two bank accounts. During the period May 2018 and June 2020, the bank statements for The Insolvent Company main account record that payments of £477,515.95 were received and £470,716.53 was paid out. The majority of payments received into The Insolvent Company main account (which totalled £447,076.50) were from a company connected to The Insolvent Company and the co-director. During the same period (May 2018 and June 2020):

• 34 payments totalling £133,000 were made to The Disqualified Director;
• 126 payments totalling £224,850 were made to The Disqualified Director; and
• 16 payments totalling £53,086.20 were made to HMRC.

 During the period May 2018 to June 2020, the bank statement for The Insolvent Company 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 The Insolvent Company The 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 The Insolvent Company by the directors .
•  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 The Insolvent Company 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 76 – Director disqualification for trading to the detriment of HMRC

Director Disqualified for 2 years by a director signed undertaking.

Between 07 August 2015, when the Value Added Tax (VAT) liability for the VAT quarter ended 06/15 fell due, and October 2017 when it ceased trading, I relied on my co-director, The Director Disqualified, to solely deal with the financial management of The Insolvent Company which inadvertently caused The Insolvent Company to trade to the detriment of HM Revenue and Customs (HMRC) in respect of VAT and Pay As You Earn Income Tax & National Insurance Contributions (PAYE/NIC); in that:

VAT

• The Insolvent Company registered for VAT on 07 February 2014.
• Nil returns were submitted for periods 03/14 to12/14.
• No returns were submitted during the period of 03/15 to 06/17.
• An assessment of £3,450 was raised for the period 03/15 which was paid in full on 23 August 2016.
• An assessment of £3,662 was raised for the period 06/15 and a payment of £550 was made on 23 August 2016, leaving an outstanding liability for this period of £3,112 which remained unpaid at the date of liquidation.
• Further assessments were raised for the periods 09/15 to 09/16 and 06/17 resulting in liabilities of £37,014 (including penalties and surcharges) which remained unpaid at the date of the liquidation.
• PAYE/NIC under the Real Time Information system (RTI)
• The Insolvent Company submitted PAYE returns to 5 October 2017
• Liabilities outstanding at the date of liquidation totalled £42,612 for the periods 2015/2016 to 2017/2018, accruing from the end of the tax year 2015/16 at the latest.
• The last payment made was £2,369 on 29 December 2016 which was allocated to period 05 November 2016.

Different Treatment

• An analysis of ASC’s bank statements details that a total of £1,364,044 was expended from the account during the period 07 August 2015 to 12 December 2017. Of this, £35,962 was paid to HMRC whilst £1,328,082 was used to pay trade creditors and other parties.

the company’s total liabilities at liquidation were £114,674 of which £114,322 was owed to HMRC.

Case 77 – Director disqualification for trading to the detriment of creditors

Director Disqualified for 9 years by Order of the Court.

Between 25 May 2021 and 1 June 2021 The Director Disqualified caused The Insolvent Company (IC), whilst insolvent, to make payments totalling £11,000 to his friends and family to the detriment of IC remaining creditors:

•  On 25 May 2021 IC had assets totalling £18,251 and owed at least £106,156 to creditors and he made an online enquiry with an insolvency practitioner.
•  Between 25 May 2021 and 1 June 2021, payments totalling £11,000 were made to friends and family of his, discharging their debts in full.

 At Liquidation £90,798 remains outstanding, which include debts in respect of BBL £50,000, HMRC £23,082, Business rates £12,716 and connected party £5,000.

Case 78 – Director disqualification for HMRC offences and loss of excise duty

Director Disqualified for 7 years by a director signed undertaking.

During the period of his appointment as sole director, the Disqualified Director caused The Liquidated Company to trade in a manner which led to HM Revenue and Customs (HMRC) suffering excise duty losses of at least £320,398 in that:-

•  At a meeting on 13 May 2019, HMRC inspected The Liquidated Company’s records. Following the meeting HMRC concluded that The Liquidated Company had failed to provide any evidence that the cash income the company received related to alcohol supplied outside the UK;
•  HMRC raised assessments against The Liquidated Company of excise duty due totalling £320,398 in accordance with the provisions of section 73 of the VAT Act 1994. The assessments covered the VAT periods 11/16 to 05/18;
•  On 15 February 2021, HMRC issued a penalty for deliberate inaccuracy in the amount of £192,238;

 On 26 August 2020, the company was placed into liquidation citing debts of £330,198.

Case 79 – Director disqualification for false Bounce Back Loan application

Director Disqualified for 14 years by Court Order.

The Director Disqualified caused The Liquidated Company (LC) to falsely apply for a Bounce Back Loan (BBL) of £20,000 on 6 July 2020 when it was not entitled to funds from the BBL scheme, in that:

•  A Business could apply for a BBL if it had been adversely affected by Covid-19.
•  Companies House submission disclose that LC submitted dormant accounts for the Y/E 30 September 2020.
•  Between 10 The Disqualified Director 2020, when the company bank account was opened, and 6 July 2020, there was no income into the company bank account.
•  Between 6 July 2020 and 20 October 2021, the date of liquidation, there was no income into the company bank account.
•  On 1 July 2020, despite him advising that the company was trading, he engaged with a Business Finance company and made enquiries about Microfinance Fund Loans and Start up Loans.
•  In the BBL application, he stated that the company had a projected turnover of £680K, and stated that the company had been adversely impacted by Covid- 19.
•  In communications with Insolvency Service (IS) he states that there were no work contracts in place, nor were there any employees.
• Therefore, LC was not trading on 1 December 2020, was not adversely affected by Covid-19 and was not entitled to any loan from the BBL funds.

On 20 October 2020 LC entered liquidation with £20,000 being owed to the bank in relation to the BBL.

Case 80 – Director disqualification for trading to the detriment of HMRC

Director Disqualified for 3 years by a director signed undertaking.

The Director Disqualified failed to ensure that The Insolvent Company complied with its statutory obligations to remit monies as and when due to HMRC and caused The Insolvent Company to trade to the detriment of HMRC in respect of VAT from 07 February 2016 at the latest until April 2018, resulting in a liability of £136,222 due to HMRC for VAT at Liquidation in that:

•  HMRC have issued a claim in the liquidation with regard to VAT, amounting to £130,531.27 and surcharges of £5,691.49 owed from the quarter ended 12/15 to the quarter 06/18.
•  Accounts as at 31 March 2016 show that trade creditors were nil, HMRC were owed £71,565, a connected company was owed £45,821 and other creditors totalled £4,650.
•  As at the date of liquidation a connected company was owed £25,136, HMRC was owed £136,222 in respect of VAT and £5,500 in respect of corporation tax, nil to trade creditors and nil to other creditors.

HMRC records which cover the 12/15 to the 06/18 VAT periods show that no payments were made in respect of VAT.

Case 81 – Director disqualification for false Bounce Back Loan application

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

The Disqualified Director caused or allowed The Insolvent Company to apply for a Bounce Back Loan of £50,000 on 7 August 2020 when he knew or ought to have known that The Insolvent Company was not eligible for the loan, with the funds being used for the benefit of a connected company. In that:

•  On 6 August 2020 a Bounce Back Loan was applied for in the name of The Insolvent Company. A declaration was made that The Insolvent Company met the eligibility criteria for the loan. The company turnover declared on the application form for 2019 was £200,00.
•  On 7 August 2020 £50,000 loan was paid into The Insolvent Company’s bank account.
•  Between 13 August 2020 to 22 October 2020 the £50,000 was transferred to a connected company.
•  To be eligible for a Bounce Back Loan, The Insolvent Company was required to have been engaged in trading or commercial activity on 01 March 2020. Bank statements for the company show no transactions before August 2020. The Director stated to Insolvency Service that the company had ‘no established trade’
•  The Insolvent Company was not eligible for the Bounce Back Loan Scheme, as it had no trading turnover, was not engaged in trading or commercial activity at the date of the application, and the loan was not used to provide economic benefit to the business.

 At the time of liquidation, the Bounce Back Loan of £50,000 had not been repaid

Case 82 – Director disqualification for incorrect VAT returns

Director Disqualified for 10 years by Order of the Court.

The Disqualified Director (DD) failed to ensure that the Liquidated Company (LC) filed accurate VAT returns for the periods 06/17 to 09/18 inclusive or make payments as and when due, resulting in liabilities to HMRC in respect of those VAT periods totalling £92,588 (excluding surcharges and interest), which remained outstanding when LC went into liquidation, in that

• the Company, having commenced trading in April 2017 should have submitted its first VAT return to HMRC in respect of the period ending 06/17 and quarterly thereafter. No returns were submitted to HMRC until 15 January 2019, when 6 returns were submitted disclosing liabilities totalling £45,464.
• An investigation by HMRC established that liabilities disclosed in the 6 VAT returns had been under-declared by £47,124.

Furthermore, following a visit by HMRC to LC authorised agent in January 2019, she failed to ensure that LC met its financial and statutory obligations to submit VAT returns for the periods 12/18 (due by 07 February 2019) to 06/19 inclusive or make payments as and when due, resulting in HMRC raising assessments totalling £60,428 (excluding interest), which remained outstanding when LC went into liquidation, in that

• HMRC visited the authorised agent of LC on 10 January 2019 to examine LC books and records for VAT purposes. On 14 January 2019 HMRC wrote to LC advising that with immediate effect LC must keep a record of Daily Gross Takings, including all cash and card receipts.
• GH failed to file VAT returns for the 3 VAT periods 12/18 to 06/19 inclusive. HMRC initially raised assessments totalling £23,818.
• When calculating the total under-declarations for the VAT periods 06/17 to 09/18 in September 2019, HMRC increased their assessments in respect of the 12/18 to 06/19 VAT periods by £36,610.

HMRC issued a Winding Up Petition against LC in January 2020 in the sum of £191,820, which included £153,016 in respect of the VAT periods 06/17 to 06/19 (excluding surcharges and interest) detailed above.

1.6 When LC went into liquidation on 05 March 2020 the only other creditors detailed in the company’s Statement of Affairs were in respect of a Director’s Loan Account in the sum of £2,377 and a Bank Overdraft in the sum of £114

1.7 Bank statements show that for the year ending 31 March 2018, LC received credits totalling £178,169; for the year ending 31 March 2019 LC received credits totalling £260,438; and for the period ending 31 October 2019, being the day prior to her resignation as a director, LC received credits totalling £172,559.

1.8 No payments were made to HMRC in respect of the Company’s VAT liability.

Case 83 – Director disqualification for trading to the detriment of creditors

Director Disqualified for 3 years by a director signed undertaking.

Between 02 June 2020 and 16 July 2020, The Banned Director caused or allowed The Insolvent Company (IC) to enter into transactions totalling £57,065 for her own benefit, for the benefit of her co-director and that of a connected party, at the risk of and ultimate detriment to KI’s general body of creditors. These transactions took place at a time when she knew or should have concluded that IC was insolvent or alternatively, that it would become insolvent as a result of these transactions, in that:

 IC was unable to trade after 20 March 2020 due to restrictions imposed by the Government as a result of the pandemic.

 On 04 May 2020, IC received a Covid 19 Small Business Grant of £10,000.

 On 06 May 2020 IC received a rebate of business rates of £9,954.

 IC failed to pay an invoice dated 23 April 2020 for the sum of £14,616 in respect of contractual fees raised by the company that appealed the rates liabilities on IC behalf. Payment was due within 30 days of the date of the invoice and remained unpaid at liquidation.

 On 12 May 2020 ICreceived a Bounce Back Loan of £48,000.

 On 06 May 2020 IC received a rebate of business rates of £9,954.

 At 01 June 2020, IC had assets of £69,482 and liabilities of at least £82,780.

 Between 02 June 2020 and 16 July 2020, a total of £50,400 was transferred to a bank account held in the names of her and her co-director.

 Between 05 June 2020 and 17 June 2020, a further £745 was transferred from IC bank account to directly pay costs on behalf of her and her co director personally.

 On 12 June 2020, £4,920 was paid to a co-director’s personal bank account with the reference New Property.

 On 15 June 2020, £1,000 was paid to a connected party in repayment of a loan.

 On 06 July 2020, IC received a further business rates rebate of £14,257.

 On 21 July 2020, IC advisor contacted an Insolvency Practitioner on behalf of IC for insolvency advice.

 KI entered into Creditor’s Voluntary Liquidation on 15 October 2020.

 At liquidation, IC liabilities to creditors totalled £115,898.

Case 84 – Director disqualification for accounting issues and non-payment of the crown

Director Disqualified for 3 years by a director signed undertaking.

Between 07 November 2016 and 06 November 2019, the date of liquidation, The Banned Director failed to ensure that The Insolvent Company submitted all returns and payments to HM Revenue and Customs (hereinafter referred to as HMRC) in respect of VAT and Corporation Tax as and when they fell due and caused or allowed The Insolvent Company to trade to the detriment of HMRC so that at liquidation, The Insolvent Company had an outstanding HMRC liability of at least £163,294.93 and no other creditors:

VAT

 The Insolvent Company compulsory registered for VAT on 01 July 2016 backdated to 01 September 2015 to submit returns quarterly;

 An Officers Assessment was applied for period 09/16 which covered the entire first period from registration for £20,740.30. Penalty charges of £2,719.00 were further applied for this period.

 Returns were submitted on time for periods 12/16 to 09/19 (twelve in total) totalling £70,122.00, additional charges of £5,474.40 were raised due to non-payment in full.

 A single payment of £1,000.00 was made against the outstanding liability on 04 October 2017.

 An assessment was raised the final period of trade, 12/19, totalling £1,211.00, meaning that as at the date of liquidation, HMRC claimed a liability in respect of VAT of £99,266.70.

Corporation Tax

 For the period ending 31 March 2016 The Insolvent Company incurred £19,832.80 of Corporation Tax. A single payment of £3,316.13 was made against the liability so £16,516.67 remained outstanding at liquidation.

 For periods ending 31 March 2017 and 31 March 2018, £22,806.90 and £24,404.66 of Corporation Tax was incurred respectively. No payments were made against this liability so that as at the date of Liquidation, HMRC claimed a liability in respect of Corporation Tax of £64,028.23.

Comparative Treatment.

 For the year ending 31 March 2016 prepared accounts show that £19,833.00 was owed to HMRC for VAT and Corporation Tax whilst £7,491.00 was owed to all other creditors.

 For the year ending 31 March 2017 the filed accounts show that £74,852 was owed to HMRC for VAT and Corporation Tax, with all other creditors owed £9,635.00.

 For year ending 31 March 2018 the prepared accounts show £136,644.00 was owed to HMRC in respect of VAT and Corporation Tax.

 At liquidation HMRC submitted a proof of debt for £168,024.44 and no other creditors have been disclosed.

Case 85 – Director disqualification for trading to the detriment of HMRC

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

The Banned Director caused The Insolvent Company (The Insolvent Company) to trade to the detriment of HMRC from 7 January 2019 as regards VAT and from 22 February 2019 as regards CIS, resulting in liabilities of £300,641.39, in that.

The Insolvent Company incurred Construction Industry Scheme liabilities totalling £180,992 for the period 22 February 2019 to 05 November 2021, against which it made payments of £9,509, leaving a liability of £171,483.

The Insolvent Company incurred VAT Liabilities totalling £140,894.65 for the VAT periods from November 2018 (due for payment on 7 January 2019), against which it made payments of £11,826.26 , leaving a liability of £129,158.39.

At the date of Liquidation HMRC was the Company’s largest creditor, owed £310,962.97 out of liabilities totalling £491,387.58.

During the period from 1 November 2018 to 5 November 2021 The Insolvent Company paid at least £1,134,136 out of its bank account to general trade creditors, subcontractors and in general cheque payments. In the same period £21,335 was paid to HMRC

Case 86 – Director disqualification for use of a disguised remuneration scheme

Director Disqualified for 5 years by a director signed undertaking.

Between 15 December 2017 and 8 January 2018, I caused The Insolvent Company to use the sale proceeds of its main asset to pay £3,216,000 to associated companies , which was to the risk and ultimate detriment of HMRC who had been conducting an investigation since December 2015 into The Insolvent Company’s use of a Remuneration Trust Scheme. By 15 December 2017 HMRC had issued assessments totalling £568,611.65 which had increased by the date of liquidation.

Knowledge of HMRC liability

 Between 29 January 2016 and 15 December 2017 HMRC issued Regulation 80 determinations in respect of PAYE and Corporation Tax assessments totalling £568,611.65

 After each determination or assessment The Insolvent Company exercised its right of appeal disputing HMRC’s assessment, and so I knew or ought to have known that HMRC’s claim could result in a liability.

Sale of Business

 On 8 December 2017 I signed a sale agreement with a purchaser on behalf of the company selling future income rights in consideration of a payment by the purchaser of £3,416,125

 On 15 December 2017 The Insolvent Company received a sum of £3,416,125 by bank transfer.

 From 8 January 2018 onwards the company did not receive any trading income and total income of just £2,600.

Transactions

 As at the close of business on 15 December 2017, The Insolvent Company had cash at bank of £3,582,905.79.

 On 18 December 2017 The Insolvent Company made payments to 2 companies associated with the directors totalling £3,000,000 .

 On 27 December 2017 The Insolvent Company made payments to 2 companies associated with the directors totalling £216,000.

 There are no documents in the accounting records of The Insolvent Company to explain the reason for the payments to the associated companies and they were not recorded as creditors in the Statement of Affairs.

 As a result of these transactions, I caused The Insolvent Company to have insufficient capital to satisfy the contingent liability to HMRC at a time when there was no prospect of The Insolvent Company obtaining future income to satisfy that liability when it became due.

Case 87 – Director disqualification for non-payment of HMRC

Director Disqualified for 4 years by a director signed undertaking.

The Banned Director caused The Insolvent Company to trade to the detriment of HM Revenue and Customs (HMRC) by failing to make payments as and when they fell due from at least 1 July 2017 to 20 January 2020 resulting in additional liabilities for PAYE/NIC of at least £42,955 and VAT of £84,412, in that:

PAYE/NIC

 Information supplied by HMRC shows that between 1 July 2017 and 20 January 2020 The Insolvent Company accounted for £48,582 in PAYE and NIC. HMRC received payments of £6,843 in this period.

 HMRC’s claim in the winding up petition in respect of PAYE and NIC was £46,244 (including interest of £1,583).

VAT

 Information supplied by HMRC shows that between 1 July 2017 and 20 January 2020 The Insolvent Company were liable for £135,159 of VAT. HMRC received payments of £50,747 in this period.

 HMRC’s debt in the liquidation in respect of VAT was £122,624.

DIFFERENTIAL TREATMENT

 The Insolvent Company’s accounts for the year ended 30 June 2017 record that the amount owing to trade creditors was £41,514. Information supplied by HMRC shows that as at 30 June 2017 the amount owing in VAT/PAYE was £45,586.

 At Liquidation, The Insolvent Company HMRC were its largest creditor who were owed £168,885 in respect of VAT/PAYE. In comparison trade creditors were owed £45,204.

Between 1 July 2017 and 20 January 2020 bank statements show payments totalling £1,770,689 were made of which payments of £56,596 were made to HMRC compared to net payments of £124,249 to him, £132,410 in wages and £896,114 to trade creditors.

Case 88 – Director disqualification for

Director Disqualified for 7 years by Order of the Court.

The Company Director failed to ensure that, from 28 January 2020, the date of incorporation to 25 August 2021, the date of liquidation, the Insolvent Company maintained and/or preserved adequate accounting records, or in the alternative he failed to deliver up such accounting records as were maintained or preserved to the liquidator. As a consequence of this failure, in particular amongst others, it has not been possible to determine:

The purpose of payments totalling £52,000 made by The Insolvent Company after receipt of a Bounce Back Loan (BBL) on 21 May 2020 of £50,000 and sales of £3,037 between 21 May 2020 and 26 May 2020 including:

6 payments to 3rd parties totalling £38,000

1 transfer to an unknown bank account of £10,000

2 cash withdrawals totalling £4,000.

21 cash withdrawals between 21 February 2020 and 18 May 2020 totalling £31,650

20 cash withdrawals between 29 May 2020 and 28 September 2020 totalling £31,000

Whether all the credits into the bank account for The Insolvent Company relate to and account for all the company sales.

Establish the accuracy of the Statement of Affairs lodged in the Liquidation.

Verify the reasons for The Insolvent Company’s failure.

Case 89 – Director disqualification for trading to the detriment of HMRC

Director Disqualified for 5 years by a director signed undertaking.

The Banned Director (The Banned Director) caused or allowed The Insolvent Company (The Insolvent Company) to trade to the detriment of HM Revenue and Customs (HMRC) in respect of Value Added Tax (VAT) from 07 December 2012 and in respect of Pay As You Earn and National Insurance Contributions (PAYE and NIC) from 22 July 2013 until 10 May 2019, the date of liquidation. In that:

Value Added Tax

On 07 December 2012, the payment for the VAT return for the period ending 31 October 2012 became due for payment.

Between 07 December 2012 and the date of liquidation, The Insolvent Company incurred VAT liabilities including penalties and interest of £137,609 and made payments to HMRC totalling £3,564.

At the date of liquidation, the liabilities to HMRC in respect of VAT was £134,045.

Pay As You Earn

On 22 July 2013, the payment for the PAYE and NIC return for the period ending 05 July 2013 became due for payment.

Between 22 July 2013 and the date of liquidation, The Insolvent Company incurred PAYE and NIC liabilities including penalties and interest of £53,704 and during the same period made payments to HMRC totalling £13,472.

At the date of liquidation, the liabilities to HMRC in respect of PAYE and NIC were £40,233.

DIFFERENTIAL TREATMENT

The Banned Director operated an overdrawn Directors Loan Account (DLA). The financial statements for the year ending 31 October 2013 show an overdrawn balance of £8,252. As the date of liquidation, the overdrawn DLA was at least £100,000.

The financial statements for the following years show:

2013 Trade creditors £387 and taxation and social security £7,363.

2014 Trade creditors £5,490 and taxation and social security £28,679.

2015 Trade Creditors £35,937 and taxation and social security £28,679.

2016 – Trade Creditors £32,945 and taxation and social security £49,568.

2017 – Trade Creditors £113,524 and taxation and social security £120,131.

The 3 banks accounts operated by The Insolvent Company show that during the period of the allegation credits totalling £2,250,407 were received, payments made to trade creditors totalling £1,435,065, payments made to The Banned Director totalling £364,943, of which £177,461 was repaid and payments to HMRC totalling £16,361

At the date of liquidation trade creditors were £53,488 whilst HMRC’s claim in the liquidation is £222,572

One of the trade creditors has submitted a claim in the liquidation for £31,000. This relates to liabilities incurred in May 2018, whereas The Insolvent Company started to trade to the detriment of HMRC from December 2012 in relation to VAT and July 2013 in relation to PAYE and NIC. Between June 2018 and the date of liquidation the trade creditor received payments totalling £6,000 whereas HMRC did not receive any payments.

A connected company, by way of the same director, agreed to pay a number of outstanding invoices outstanding to the company and the associated company has made a subrogated claim in the insolvency for £17,251.

Case 90 – Director disqualification for

Director Disqualified for 8 years by a director signed undertaking.

Between 10 April 2018 and 11 May 2018, The Banned Director (The Banned Director) caused or allowed The Insolvent Company (IC) to enter into transactions totalling £223,993 for his own benefit and that of his co-director, at the risk of and ultimate detriment of Her Majesty’s Revenue and Customs (HMRC). These transactions took place at a time when The Banned Director knew or should have concluded that G&A was insolvent or alternatively, that it would become insolvent as a result of these transactions, in that:

8.1 Accelerated Payments Notices (APN’s) were issued to IC on 26 August 2016 by HMRC for the sum of £122,101 in respect of National Insurance Contributions (NIC) and £356,797 in respect of Pay As You Earn (PAYE) which became due for payment 29 November 2016.

8.2 On 25 May 2017, following a review by HMRC, the APN raised on 26 August 2016 in respect of PAYE, was reduced to £353,000 and became due on 30 June 2017.

8.3 HMRC applied Late Payments Notice penalties (LPN’s) of at least £47,510 between 09 November 2017 and 23 February 2018 in respect of non-payment of the APN’s.

8.4 G&A’s accountant appealed the LPN’s on behalf of IC but the appeals were rejected by HMRC on 28 February 2018, 06 April 2018 and on 31 May 2018.

8.5 On 09 April 2018, IC had assets of £549,726 and liabilities of £675,080.

8.6 Between 10 April 2018 and 11 May 2018, a period of just one month, at least £223,993 was paid to or for the benefit of The Banned Director and to or for the benefit of his co-director, at the risk of HMRC, as no provision was made for payment of IC’s liabilities to HMRC which totalled, at the time, £625,334 (including Corporation tax of £102,723).

8.7 Between 15 June 2018 and 22 June 2018, The Banned Director loaned £20,000 to IC. This was insufficient to provide for the outstanding liabilities due to HMRC.

8.8 Total liabilities at the date of liquidation were £766,950 of which £755,203 was owed to HMRC.

Case 91- Director disqualification for breach of the BBL scheme and other offences

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

The Banned Director caused The Insolvent Company to obtain a loan of £50,000 under the government-backed bounce back loan scheme (BBLS), to which it was not fully entitled, by the provision of false information and caused The Insolvent Company to act in breach of the terms of the BBLS loan and to the detriment of its creditors, in that:

The eligibility criteria shown in the banks application state You can apply for a loan which is up to 25% of your annual turnover in calendar year 2019, to a maximum of £50,000. If your business was established after 01 January 2019, you should apply the 25% limit to your estimated annual turnover from the date you have started your business.

The Banned Director signed and dated the BBLS application on 26 June 2020 and stated The Insolvent Company’s annual turnover was £250,000 and applied to borrow £50,000. The Banned Director ticked the box in the application to confirm that the amount borrowed was equal to or less than 25% of annual turnover for 2019.

Annual accounts prepared for The Insolvent Company to 28 February 2019 show the turnover was £91,100 and for 28 February 2020 the turnover was £81,630. The accounts to 28 February 2019 were signed by The Banned Director on 15 November 2019 and the accounts to 28 February were signed by The Banned Director on 22 February 2021. The Banned Director was therefore only entitled to apply for a maximum of £22,775 based on the turnover to 28 February 2019 of £91,100 being the equivalent of 25% under the terms of the BBLS.

Under the terms of the agreement BBLS are only provided for uses that bring economic benefit to the company. The Banned Director stated the funds were used to develop software in India which would result in generating business revenue for the company.

The bank statements show from the date of receipt of BBLS funds on 26 June 2020 to 23 November 2020 there were no sales receipts. Bank statements for the The Insolvent Company company bank account show payments totalling £21,533 of the BBLS funds, made between 29 July 2020 and 17 August 2020 to a third party organisation in India; £9,579 of the funds were used on business expenses; and £18,888 of the funds were used for The Banned Director’s personal benefit meaning the BBLS funds were not used entirely for the economic benefit of the company. In the year to February 2020 The Banned Director’s salary had been £7,540.

In November 2020, The Banned Director sought the advice of Insolvency Practitioners.

The Insolvent Company was placed into liquidation on 01 April 2021 and the BBLS moneys remains unpaid.

Case 92 – Director disqualification for trading to the detriment of the crown

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

1. From 23 April 2018 to 22 September 2019, The Banned Director caused the Insolvent Company to trade to the detriment of HM Revenue and Customs (HMRC) resulting in liabilities in respect of PAYE of £113,324 (excluding interest and charges) in that;

PAYE

From 23 April 2018 to 22 September 2019, he failed to make the required

payments on behalf of The Insolvent Company in respect of PAYE returns submitted by The Insolvent Company

totalling £130,262.

HMRC have lodged a claim in the liquidation in respect of PAYE for £113,324

(excluding interest and charges).

Comparative Treatment.

From 23 April 2018 to 22 September 2019, analysis of the available records of

The Insolvent Company and information provided by HMRC shows;

Total receipts of at least £1,734,290, of which;

£1,400,412 is in respect of sales

£280,900 is in respect of receipts from corporate entities of which he was

a common director at the date on which payment was received.

Total expenditure of at least £1,751,110 of which

£780,702 is in respect of trade and expense

£673,061 is in respect of wages

£171,772 has been paid to corporate entities of which he was a common

director at the date of the payments.

Total payments to HMRC of £1,885.

Page 3 of 3

2. From 07 June 2018 to 07 September 2019, he failed to register The Insolvent Company for VAT when its

sales exceeded the threshold for registration or remit VAT it collected in respect of sales

that The Insolvent Company conducted using the details of a connected company, of which he was the

sole recorded director, resulting in estimated liabilities in respect of VAT of £139,657

(excluding interest and charges) due to HMRC, in that:

VAT

In the VAT periods 04/18 to 07/19 (the Period), The Insolvent Company collected the VAT that

it had charged on sales. The related sales documents provided the company

registration number and VAT number assigned to a connected company, of

which he was the sole registered director. For VAT periods 04/18 to 04/19, the

connected company filed VAT returns with HMRC recording a nil position for

each of those periods, the connected company was de-registered for VAT on 01

May 2019 and no payments were made against its VAT number in the Period.

The Insolvent Company failed to register for VAT, failed to make any return to HMRC in relation

to the VAT it had collected and failed to remit any funds to HMRC in respect of

the VAT that it had charged on sales.

The Insolvent Company’s available records for the Period record that The Insolvent Company collected VAT of at

least £233,313 on sales and paid VAT of at least £83,656 on purchases, giving

an estimated VAT liability due to HMRC of at least £139,657 (excluding interest

and charges) which The Insolvent Company failed to remit.

Case 93 – Director disqualification for not paying corporation tax

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

Between 01 February 2018 and 31 January 2019 The Banned Director (‘The Banned Director’) failed to ensure that IC The Insolvent Company (‘IC’) met its financial commitments as regards to Corporation Tax (‘CT’) whilst withdrawing funds of £699,400 to the detriment of HMRC and for the benefit of the directors under a Directors Loan Account (‘DLA’) in that:

Corporation Tax

A CT Return was submitted for the financial year ending 31 January 2017, which declared a CT liability of £48,471, due to be paid no later than 01 November 2017. Only one payment of £2,167 was made, on 26 April 2019, with £46,304 outstanding at liquidation, together with penalties charged of £400.

A CT Return was submitted for the financial year ending 31 January 2018 which declared a loss of £1,501, with consequently no CT due to be paid, and providing an allowance of £300 to be set off against CT for other periods.

A CT Return for the financial year ending 31 January 2019 declared a CT liability of £278,385, of which £87,416 related to tax on profits declared, and £190,969 was a charge based on a DLA incurred during the period. No payment has been made against the liability.

In total therefore £327,441 is owed in respect of CT at liquidation (including penalties of £400 and interest of £2,652)

Different Treatment

Accounts for the financial years ending 31 January 2017 and 31 January 2019 declared total sales of £4,450,000 (there were no sales for year ending 31 January 2018), with cumulative net profits before tax for the three years totalling £702,038.

Accounts for the financial year ending 31 January 2018 stated that the sum of £111,804 was owed by IC to the directors under a Directors Current account. The sum of £48,471 in respect of CT for the financial year ending 31 January 2017 remained outstanding

During the 12 month period ending 31 January 2019, accounts show that the £111,804 Directors Current account was repaid to the directors. In addition, withdrawals against a DLA were made by the directors, resulting in an amount owed to IC of £587,596 by 31 January 2019. During the 12 month period, whilst funds totalling £699,400 were withdrawn by the directors, no payments were made against the outstanding CT liability.

On 01 February 2019, after having withdrawn funds totalling £699,400, IC entered a Time to Pay agreement with HMRC in respect of CT due for the financial year ending 31 January 2017. One payment of £2,167 was made.

Creditors in the liquidation are owed £334,641, of which £327,441 is owed to HMRC.

Case 94 – Director disqualification for trading to the detriment of the crown

Director Disqualified for 6 years by Order at trial.

Between 31 July 2016 and 31 October 2017 The Banned Director (‘The Banned Director’) caused UK The Insolvent Company (‘IC’) to trade to the detriment of HMRC in respect of VAT, in that:

VAT returns were filed in respect of IC for the quarters ending 31 July 2016 to 31 October 2017, which declared a total VAT Liability of £100,013.25.

Bank statements show that the company received income of £275,180.64 during the period, of which £138,948 was paid to The Banned Director and no payments were made to HMRC in respect of the VAT liability which remains outstanding at the date of liquidation.

Case 95 – Director disqualification for accounting issues

Director Disqualified for 3 years by a director signed undertaking.

The Company Director (The Company Director) failed to ensure that The Insolvent Company (IC) maintained or preserved adequate accounting records during the period from 1 August 2018, or in the alternative failed to deliver up such records as were maintained to the liquidator. Consequently, it has not been possible for the liquidator to verify:

 The amount of income that IC received during the period from 1 August 2018 and what it spent it on

 whether any money was owed to IC at liquidation

 the amount, and purpose, of transactions between IC and an associated company, and whether the amount scheduled as owed by IC to its associate at liquidation of £380,000 is accurate.

 Whether the Bounce Back loan of £50,000, received into IC  bank account on 3 June 2020, was used for the economic benefit of the business.

Case 96 – Director disqualification for non payment of VAT and other due taxes

Director Disqualified for 12 years by Order of the Court.

The Banned Director (The Banned Director) caused The Insolvent Company (The Insolvent Company) to trade to the detriment of HM Revenue and Customs (HMRC) by failing to make payments as and when they fell due in respect of Value Added Tax (VAT) and PAYE/CIS from at the earliest 7 May 2020 in respect of VAT and 22 March 2020 in respect of PAYE/CIS.

VAT

The Insolvent Company was incorporated on 30 April 2019 and registered for VAT by the director of the company, The Banned Director, with effect from 30 April 2019.

VAT returns of £34,432 were submitted between 07 August 2019 and 07 February 2020 for periods 6/19 to 12/19 and payment made as and when due.

VAT returns of £11,890 were submitted on 07 May 2020 for period 03/20. No payments were made.

VAT returns of £1,600 were submitted on 05 August 2020 for period 06/20. Payment of £1,600 was made.

VAT returns of £15,674 were submitted between 05 November 2020 and 06 May 2021 for periods 09/20 to 03/21. No payments were made.

No VAT returns were submitted between 15 August 2021 and liquidation, resulting in assessments being raised of £13,179. No payments were made.

In total at liquidation VAT liabilities of £42,504, including interest were outstanding at liquidation.

PAYE

PAYE/CIS returns became due between 19 June 2019 and 09 March 2020 for periods 05/19 to 01/20 and payments were made as and when required.

PAYE/CIS returns of £16,925 after allowances, became due between 22 March 2020 and 22 July 2020 for periods 02/20 to 06/20 and payment of £12,698 was made, leaving £4,347 outstanding including interest of £120.

PAYE/CIS returns of £10,072 after allowances, became due between 22 August 2020 and 22 October 2020 for periods 07/20 to 09/20 and payment of £4,268 was made, leaving £10,172 outstanding including interest of £21.

PAYE/CIS returns of £33,822 after allowances, became due between 22 November 2020 and 22 September 2021 for periods 10/20 to 08/21. No payments were made until 15 October 2021, when £1000 was paid, leaving £42,994 outstanding.

PAYE/CIS returns of £8,200 became due between 22 October 2021 and 22 December 2021 for periods 09/21 to 11/21. No payments were made leaving £51,194 outstanding.

In total at liquidation PAYE/CIS liabilities of £51,194, including interest were outstanding.

COMPARATIVE TREATMENT

Corporation Tax of £5,037 is outstanding since 01.05.20.

Company bank statements show that between 7 May 2020 and 25 October 2021 £479,887 was deposited into the company bank account, £144,937 was paid to trade suppliers, £34,906 was paid to other creditors, and £100,795 was paid in wages. During the same period payments to HMRC in respect of VAT and PAYE/CIS were £12,092.

At cessation of trade HMRC was The Insolvent Company’s largest creditor with debts totalling £98,199 of The Insolvent Company’s total liabilities of £176,473.

Case 97 – Director disqualification for trading while knowingly insolvent among other offences

Director Disqualified for 12 years by Order of the Court / Court Order / Order at trial.

The Banned Director (The Banned Director) caused The Insolvent Company Ltd (The Insolvent Company) to trade to the detriment of HM Revenue and Customs (HMRC) from at least 07 September 2017 until liquidation on 22 January 2020 in respect of Value Added Tax (VAT) and Corporation Tax whilst withdrawing funds for his own benefit. As a result, The Insolvent Company became unable to meet its financial commitments to HMRC.

VAT

1.1 HMRC claim £161,544 is due in respect of outstanding VAT for the quarters ended July 2015 to January 2020 of which £12,162 is owed in respect of surcharges.

1.2 Prior to 07 September 2017 The Insolvent Company had an outstanding liability in respect of VAT and surcharges of £46,721. In the subsequent period to liquidation it incurred a further liability of £116,323 and made one payment of £1,500, giving an increase in the liability of £114,823.

1.3 The Insolvent Company made no payments to HMRC in respect of VAT after 23 October 2017 despite continuing to trade until November 2019.

Corporation Tax

2.1 HMRC claim £34,340 is due in respect of outstanding Corporation Tax for the accounting periods ending 16 January 2015, 30 June 2015, 30 June 2016, 30 June 2017 and 30 June 2018 of which £2,200 is owed in respect of penalties.

2.2 During the period 07 September 2017 to liquidation The Insolvent Company increased the amount it owed to HMRC in respect of Corporation Tax by £14,230, including a £200 penalty.

2.3 During the period 07 September 2017 to liquidation The Insolvent Company made one payment to HMRC in respect of Corporation Tax in the sum of £1,500 which was applied against tax due for the year ended 30 June 2015.

2.4 The Insolvent Company made no payments to HMRC in respect of Corporation Tax after 23 October 2017 despite continuing to trade until November 2019.

Comparative Treatment

3.1 The Insolvent Company’s financial statements for the year ended 30 June 2017 show liabilities of £74,379 in respect of Corporation Tax and £45,595 as other taxation and social security thereby totalling £119,974. Other liabilities due comprise £52,416 in respect of trade and expense liabilities, £9,438 as other creditors, and £23 relating to bank loans and overdrafts thereby totalling £61,877.

3.2 As at liquidation the total claim of HMRC is £199,338 which includes a £600 Pay As You Earn Tax charge and £2,854 interest. The total liability to HMRC has therefore increased by £79,364 compared to the year end position at 30 June 2017. By comparison, the sum of £3,950 is stated as due in respect of trade and expense liabilities, and therefore debts to other creditors have reduced by £57,927 over the same period.

3.3 Analysis of the company’s bank payments show that in the period from 07 September 2017 to liquidation the sum of £935,491 was expended, of which £587,350 was paid against trade and expense liabilities, at least £263,570 was paid to/ for the benefit of The Banned Director and only £3,000 was paid to HMRC. Analysis of bank deposits show the sum of £17,501 paid in by The Banned Director over the same period, giving net payments to him of £246,069.

Case 98 – Director disqualification for trading to the detriment of HMRC among other offences

Director Disqualified for 12 years by Order of the Court.

The Banned Director failed to comply with his statutory duties to ensure that The Insolvent Company made timely payments and returns as and when due to HM Revenue & Customs (HMRC) in relation to Value Added Tax (VAT). As a result, The Banned Director caused the Company to trade to the detriment of HMRC from 07 August 2013, at the latest in respect of VAT, resulting in a liability of at least £109,245.90, in that:

VAT

HMRC’s claim for VAT is £109,245.90 including surcharges of £7,568.31 and interest of £7,184.86.

No returns were submitted by The Insolvent Company for the periods from 31 December 2013 to 31 December 2016 and HMRC made assessments totalling £60,652.

The Insolvent Company fell into arrears with VAT on 07 August 2013 when payment for the return for the quarter 06/13 of £4,462.39 fell due and was not paid in full.

The last payment allocated to VAT by HMRC was to the 06/13 VAT period. leaving a balance payable for the period of £2,231.19.

As a result of The Insolvent Company failure to submit returns and full payments as and when due, HMRC applied default VAT surcharges of £7,568.31.

Comparative Treatment

Bank statements for The Insolvent Company, which cover the period from 01 December 2018 to 17 February 2020 show total payments from the account of £241,991.

Between 01 December 2018 and 17 February 2020, 3 payments amounting to £15.007.35 were made to HMRC. The final payment made was £2,360.59 on 05 November 2019, following a 7-day demand letter issued by HMRC on 15 October 2019.

In the same period £65,482.94 was paid with cheques by MCC, £20,656.62 was paid to banks and financial institutions and £124,248.90 was paid as miscellaneous payments.

Case 99 – Director disqualification for abuse of the Bounce Back Loan Scheme

Director Disqualified for 12 years by Court Order.

On 15 May 2020 The Banned Director obtained a Government-backed Bounce Back Loan (‘BBL’) of £50,000 for The Liquidated Company by falsely overstating its turnover in the application and disbursed the moneys in manner that was not for the economic benefit of ABS, contrary to the terms of the BBL scheme. In that:

 The Banned Director signed a BBL application on 14 May 2020 stating that The Liquidated Company turnover was £300,000 and requesting a loan of £50,000;

 In the year to 30 April 2019 The Liquidated Company accounts show that it had received income of £44,643 which would have entitled it to a BBL of no more than £11,160;

 The loan was received on 15 May 2020;

 By 08 June 2020 the moneys received had been dissipated in payments to The Banned Director and cash totalling £24,241, and also in payments to third parties;

 The Banned Director has not provided any or any satisfactory explanation for these payments and has not produced adequate documentation to the liquidator to support them.

 At the liquidation date the only liabilities were to the bank and HM Revenue & Customs for Corporation Tax for the year ended 30 April 2020.

Case 100 – Director disqualification for trading to the detriment of HMRC

Director Disqualified for 8 years by a director signed undertaking.

1. The Banned Director failed to ensure that The Insolvent Company complied with its statutory duties to register for VAT, file returns and make payments to HM Revenue and Customs (HMRC) when due. As a result, HMRC’s VAT liabilities estimated in the sum of at least £74,454 remained overdue and outstanding on liquidation. Dragons traded to the detriment of HMRC in respect of VAT from 9 November 2018 to liquidation on 5 August 2020. In that:

VAT

 The Insolvent Company was incorporated on 9 November 2018. A company is required to register for VAT with HMRC when its turnover exceeds the requisite VAT threshold. Therefore The Insolvent Company should have been registered for VAT from 9 November 2018. Dragons failed to register for VAT and failed to file any VAT returns for any period. The Insolvent Company has not made any payments to HMRC in respect of VAT.

 He stated he sought advice from a new accountant in January 2020 who advised The Insolvent Company should register for VAT.

 On 4 March 2020, HMRC attended The Insolvent Company’ trading premises gave Notice of Inspection to The Insolvent Company and requested The Insolvent Company’ records to assess The Insolvent Company’ VAT. The Insolvent Company failed to provide any documentation to HMRC.

 The Insolvent Company VAT liabilities were estimated to be £74,454.

 According to the Report to Creditors, The Insolvent Company ceased to trade on 10 July 2020.

 HMRC is the largest creditor in the liquidation. According to the Statement of Affairs which was signed by him on 22 July 2020, HMRC’s liability for VAT was £87,302.

Comparative treatment

 During The Insolvent Company’ apparent period of trade from incorporation (09 November 2018) to 24 July 2020 being the last substantive transaction on the bank account, £619,999.92 was paid into the account and £619,942.69 was paid out.

 During the same period, there were:

o Cash withdrawals in the total sum of £140,800;

o Payments to a third party A in the total sum of £38,835; and

o A transfer of £15,000 to a third party B on 7 July 2020.

 No payments have been made to HMRC in respect of VAT (or in respect of any other tax). HMRC’s VAT claim in the liquidation is £74,454.

 No trade creditors were recorded in the Statement of Affairs. The Liquidator has received claims from two energy supplier companies for £4,187.17 and £3,622.83.

 The bank were not recorded as a creditor in the Statement of Affairs. The Liquidator has received a claim from the bank in respect of a Bounce Back Loan (BBL) Scheme for £40,000.

2. He failed to ensure that The Insolvent Company maintained and/or preserved all accounting and administrative records and/or alternatively has failed to deliver up adequate accounting records to the Liquidator. In that:

 The Insolvent Company has provided one box of books and records to the Liquidator which comprise of sales and purchase invoices for July 2017 to July 2020. There is no evidence that a cash book or a record of cash transactions has been maintained.

 He failed to provide documentation to HMRC and failed to respond to the Liquidator’s enquiries.

 The Insolvent Company has not filed accounts at Companies House.

 In the absence of adequate books and records, it has not been possible to determine the purpose of transactions on the bank account, in particular:

o Cash withdrawals in the total sum of £140,800;

o Payments to a third party A in the total sum of £38,835; and

o Transfer of £15,000 to a third party B on 7 July 2020.

 On 12 June 2020 the company applied for a BBL of £40,000 declaring its annual turnover as £167,000. From 15 June 2020 (the date the BBL was received) to 8 July 2020, The Insolvent Company’ bank statements record that:

o there were cash withdrawals which totalled £19,000; and

o a transfer of £15,000 to a third party B on 7 July 2020.

 In the absence of any adequate books and records, the level of turnover declared in the BBL application cannot be confirmed that it was correct or that the £40,000 BBL was used for the economic benefit of The Insolvent Company as required by the terms and conditions of the BBL scheme. The Statement of Affairs did not record the BBL as being outstanding at liquidation.

 Furthermore, it has not been possible to ascertain:

o The full and true amounts due to HMRC for VAT, PAYE/NIC and/or Corporation Tax resulting from The Insolvent Company’ trading.

o Whether all assets have been disclosed.

o The accuracy of the statement of assets and liabilities.

o The cause of failure.

Case 101 – Director disqualification for trading to the detriment of HMRC

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

The Banned Director caused and/or allowed  The Insolvent Company (IC) to trade to the detriment of HM Revenue & Customs (HMRC) in respect of Pay As You Earn (PAYE) and National Insurance Contributions (NIC) from 22 October 2017, and in respect of Value Added Tax (VAT) from 07 April 2018, in that:

PAYE

The PAYE liability for the period ending 05 August 2017 became due for payment on 22 October 2017 at which point the PAYE account was in credit for the sum of £6,336.

Between 22 October 2017 and 26 November 2019, the date of liquidation, IC incurred a PAYE and NIC liability of at least £260,383 against which payments of £12,735 were made.

At the date of liquidation, the outstanding liability in respect of PAYE and NIC was £241,312.

VAT

IC submitted quarterly VAT returns for the periods ending 02/18 to 05/19, disclosing a liability of £8,715 against which payments totalling £3,900 were made.

IC failed to submit a return to HMRC for the period ending 08/19 resulting in an assessment being raised totalling £1,491 against which no payments were made.

Following a visit from HMRC on 04 October 2018, an investigation commenced which resulted in an officer’s assessment being raised totalling £433,629.

Comparative treatment

Analysis of the company bank statements for the period 01 January 2018 to 26 September 2019 show payments into the company’s account totalling £1,786,622 and payments totalling £1,783,457 were made from the account in the same period.

Of the payments made by the company, £1,320,149 was paid in respect of wages, while £6,114 was paid to HMRC.

During the same period, PAYE and VAT ledgers show that payments totalling £12,870 were made to HMRC.

At the date of liquidation, HMRC have submitted a claim totalling £683,139.40 while no other creditors have been identified.

Case 102- Director disqualification for non-payment of HMRC

Director Disqualified for 3 years by Order at trial.

The Banned Director (The Banned Director) failed to ensure that The Liquidated Company (The Liquidated Company) complied with its statutory obligations to HM Revenue & Customs (HMRC) by failing to register The Liquidated Company for VAT from 01 June 2016 to at least 31 December 2019, in that:

Any business is required to register with HMRC for VAT, if, by the end of any month the turnover for the last 12 months exceeds the current registration threshold, the business has a duty to register within 30 days of the end of the month when the threshold is exceeded.

For the period 01 April 2016 to 31 March 2017 the threshold for registering a company for VAT with HRMC is a turnover of £83,000.

According to the analysis by HMRC, the company reached a turnover of £83,000 in April 2016, therefore the company ought to have registered for VAT from at least June 2016 but failed to do so.

The books and records for The Liquidated Company were not delivered up to HMRC, therefore HMRC have calculated VAT due, based on the Flat Rate Scheme (FRS) for the business type Catering services, including restaurants and takeaways at 12.5%.

HMRC have estimated the VAT liability as £60,492 excluding penalties and other charges from 01 June 2016 to 31 December 2019.

Annual accounts prepared for the company show turnover for y/e 31/03/2017 as £83,051, y/e 31/03/2018 as £83,629 and for y/e 31/03/2019 as £84,626.

Bank statements have been received and analysed for the period 07 July 2018 to 19 March 2021 show deposits from online sales only, no cash deposits or individual card sales. Deposits for the period 07 July 2018 to 31 March 2019 as £52,964, 01 April 2019 to 31 March 2020 as £107,088 and 01 April 2020 to 19 March 2021 as £156.391.

In January 2020 HMRC commenced an investigation of The Liquidated Company regarding their lack of registration for VAT.

At the date of liquidation HMRC were the only creditor of The Liquidated Company LC in relation to VAT, PAYE and Corporation Tax.

Case 103 – Director disqualification for not meeting HMRC obligtions

Director Disqualified for 9 years by Order at trial.

Between 07 April 2017 and liquidation on 27 February 2020, The Banned Director (The Banned Director) failed to ensure that The Insolvent Company (IC) complied with its statutory obligations to submit Value Added Tax (VAT) returns and payments as and when due, and caused The Insolvent Company to trade to the detriment of HM Revenue and Customs (HMRC) in respect of VAT by failing to make payments when due and in full, while making payments to other creditors. In that:

The Banned Director was appointed as the sole director of IC on 16 February 2017.

VAT

The due date for submission and payment of the VAT quarter ending 28 February 2017 was 07 April 2017, at which time IC had outstanding VAT liabilities of £3,516.

For the 9 quarters ending 28 February 2017 to 28 February 2019, The Insolvent Company submitted late VAT returns to HMRC, which declared VAT liabilities totalling £249,503. HMRC raised surcharges totalling £31,233 for those quarters.

On 05 July 2019 HSL submitted a VAT return for the quarter ending 31 May 2019 declaring VAT liabilities totalling £38,876 and HMRC raised a VAT surcharge for that quarter totalling £5,831.

In the absence of returns, HMRC raised VAT assessments for the quarter ending 31 August 2019, and the subsequent period to the end of trade, totalling £65,426.

Between 05 June 2017 and 22 January 2019, HSL made 9 payments totalling £5,502 towards its VAT liabilities. Thereafter, IC made a further 19 payments totalling £44,000, between 08 March 2019 and 28 June 2019. No further payments were made after 28 June 2019.

HMRC deregistered IC on 09 November 2019. HMRC’s VAT ledgers record that at liquidation HSL owed £345,334 in unpaid VAT liabilities and surcharges.

Discriminatory Treatment.

Between 07 April 2017 and liquidation on 27 February 2020, the bank account operated by IC received funds totalling £1,771,020. In the same period, IC expended funds from its bank account totalling £1,819,577, of that £49,172 was paid towards its VAT liabilities.

Professionally prepared accounts for the year ending 01 December 2017 record liabilities of £95,860. HMRC’s VAT ledgers record £38,473 was owed in respect of VAT at that date. By comparison, at liquidation IC owed £345,334 in unpaid VAT and £570 to trade creditors.

Case 104 – Director disqualification for

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

As the sole director of The Liquidated Company Ltd (The Liquidated Company), The Banned Director (The Banned Director) failed to ensure that adequate accounting records were maintained or preserved by The Liquidated Company for the period from his appointment on 1 June 2017 to liquidation on 1 December 2020, or that adequate records were delivered up to the liquidators upon request. Due to the absence of adequate records for this period, it has not been possible to verify the income, expenditure, assets or liabilities of The Liquidated Company, or ascertain whether the annual financial statements to 31 May 2018 approved by The Banned Director on 28 February 2019 were accurate, in that:

 The Banned Director was asked by the liquidators in a letter dated 3 December 2020 to arrange for The Liquidated Company’s books and records to be delivered up. The Banned Director replied on 14 December 2020 that I have nothing else. The liquidators have confirmed that they have not received any records from The Banned Director. The Liquidated Company’s former accountant has provided a copy of The Liquidated Company’s nominal ledgers for the year ending 31 May 2018. No records at all are available from 1 June 2018 onwards.

 It has not been possible to determine whether The Liquidated Company ought to have been registered for VAT and if so, what its VAT liabilities were. Information held by HM Revenue & Customs indicates that in the year ending 31 May 2018, The Liquidated Company turned over at least £124,927 via online intermediary and card sales. The VAT registration threshold during this period was £85,000 but The Liquidated Company was not registered for VAT at any time and no payments were made to HM Revenue & Customs in respect of VAT.

The nominal ledgers and annual financial statements for the year ending 31 May 2018 indicate that The Liquidated Company’s turnover was £72,407 inclusive of online intermediary, card, and cash sales. In addition to potential unpaid VAT, the accuracy of the profit and loss account and therefore taxable profits cannot be confirmed.

Information held by HM Revenue & Customs also indicates that between 1 July 2018 and 31 August 2018, The Liquidated Company turned over a further £15,935 via online intermediary sales. No information is held for June 2018 or September 2018 and no information about in-person cash sales or cash expenditure besides year end journal entries is held for any period.

There are no adequate payroll records and only one payment to HM Revenue & Customs was made, on 6 November 2018. It therefore isn’t possible to determine whether the correct tax treatment was applied to payments made to employees or whether there is any outstanding PAYE/NIC liabilities due to HMRC.

It is not possible to identify The Liquidated Company’s suppliers and therefore it cannot be confirmed that transactions identified as purchases in the ledgers, or various payments to third parties not listed in the payroll ledger, were in fact for the benefit of The Liquidated Company, nor is it possible to ascertain whether there are any further creditors or any debtors.

Case 105 – Director disqualification for a fraudulent application for a BBL

Director Disqualified for 13 years by a signed undertaking of the director.

On 18 May 2020 The Company Director caused The Dissolved Company to make a fraudulent application for a Bounce Back Loan (BBL) by providing false information to a lender to obtain a BBL totalling £50,000 when he knew or ought to have known that The Dissolved Company was eligible for a BBL loan based on its turnover of no more than £4,328.

The Bounce Back Loan 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.

The Dissolved Company was incorporated on 25 June 2019. In the BBL application form completed and signed by The Company Director on 18 May 2020 The Company Director stated that the turnover for the 2019 calendar year was £212,000.

No accounts have been prepared for the company.

Bank Statements for The Dissolved Company for the period 04 July 2019, the date the account was opened, to 20 May 2020, the date the bounce back loan was paid in, show a turnover of £17,312. Based on this The Dissolved Company would have been eligible for a loan of no more than £4,328

On 20 May 2020 a bounce back loan of £50,000 was paid into The Dissolved Company’s bank account.

Between 18 August 2020 and 13 November 2020 two payments totalling £64,000 were made from The Dissolved Company’s bank account.

The Insolvency Service has been unable to verify whether these payments were made for the economic benefit of the company.

Creditors at the date of liquidation are £52,800 comprising of the £50,000 Bounce back loan and £2,800 stated to be owed to the director.

The Failed Company.

The Company Director failed to ensure that The Failed Company maintained and/or preserved adequate accounting records or alternatively he has failed to deliver up such records as were maintained and/or preserved to the Liquidator for the period 01 April 2019 to 15 September 2020, the date the company entered liquidation. As a result, it has not been possible to:

Verify whether The Failed Company was eligible for the maximum bounce back loan amount of £50,000 which was received on 14 May 2020.

Determine whether 7 payments totalling £49,140 made between 04 June 2020 and 18 August 2020 were for a purpose connected with business.

Case 106 – Director disqualification for accounting malpractice.

Director Disqualified for 7 years by Order of the Court.

The Company Director (The Company Director) failed to ensure that The Insolvent Company (The Insolvent Company) maintained and/or preserved adequate accounting records or in the alternative failed to deliver up accounting records to the Liquidator for the period 14 August 2020 (the date on which he was appointed director) to 08 February 2021, the date of the Liquidation. As a result, it has not been possible to determine:

Whether the company was eligible to apply for a government backed Bounce Back Loan (BBL) of £50,000 which was received into the bank account on 21 August 2020 and whether the funds were used for the economic benefit of the company as required by the terms of the BBL scheme.

The nature of outgoing transactions made from the company bank account between 24 August 2020 and 02 February 2021 after receipt of the BBL, or to verify if these transactions were made in the ordinary course of business and for the benefit of HS The Insolvent Company and its creditors. In particular:

Payments totalling £26,451 to unknown recipients;

Payments totalling £19,157 to other parties;

£4,380 in unexplained cash withdrawals.

According to The Company Director all the money received from the BBL was used to pay off debts incurred due to covid19. However he has provided no company records to verify the legitimacy of these transactions or to enable recoveries for the benefit of creditors who are owed £52,000 at liquidation.

At liquidation the company had liabilities totalling £56,500, of which £50,000 was owed to BBL provider, £4,500 was owed to the director and £2,000 was owed to trade creditors.

Case 107 – Director disqualification for misuse of the BBL scheme

Director Disqualified for 10 years by a director signed undertaking.

Between 18 May 2020 and 12 June 2020, whilst not formally appointed as a director, The Banned Director (‘The Banned Director’) caused or allowed The Liquidated Company (‘LC’) to provide misleading information to obtain two Bounce Back Loans (‘BBLs’), totalling £88,000, resulting in LC obtaining £74,803 more than it was eligible for under the BBL scheme, in that:

 Businesses adversely impacted by Covid 19 could apply for a BBL.

 Only one BBL was permitted to be obtained per business, for up to 25% of the turnover of a business in 2019, to a maximum value of £50,000. Funds provided were to be used for the economic benefit of the company.

 Micro-entity Accounts were filed at Companies House on 11 December 2019, for the period ending 30 November 2019, which were signed by another individual (‘Individual A’). There were no formally appointed directors recorded at Companies House on the date the accounts were signed. On the same day, a Corporation Tax return was filed with HMRC for the same period, declaring turnover of £51,000.

 Bank receipts for December 2019 total £1,788, which gives estimated total turnover for 2019 of a maximum of £52,788. GDMSS was therefore eligible for a BBL of no more than £13,197.

 On 18 May 2020, Individual A was appointed as the sole formally appointed director of LC. Whilst Individual A was the sole formally appointed director, He has stated that he was in control of LC, and made all decisions.

 LC applied for a BBL from Bank A. The application asked for Turnover 2019, to which LC provided the misleading figure of £200,000.

 Bank A paid £40,000 into the bank account of LC on 20 May 2020, which was £26,803 more than LC was eligible for under the BBL scheme.

 Contrary to the terms and conditions of the BBL scheme that only one BBL could be obtained for each company, LC made a second BBL application to Bank B, stating that turnover was £192,000.

 Bank B paid £48,000 into the bank account of LC on 12 June 2020. LC was not eligible to receive any of the £48,000 obtained from Bank B, as only one BBL loan was allowed, and LC had already obtained £26,803 more than it was eligible for from Bank A.

 Limited records have been provided to the Liquidator of LC, and as a result it is not known how much, if any, of the BBL funds were used for the economic benefit of LC. He has stated he spent 20-30% of BBL funds received on personal expenses.

Case 108 – Director disqualification for breach of fiduciary duties

Director Disqualified for 10 years by a director signed undertaking.

From at least 01 November 2016 until 03 August 2021, The Banned Director (The Banned Director) breached his fiduciary duties as a director of The Insolvent Company (IC) by drawing total funds of £319,941, including dividends that were £63,288 in excess of what IC’ profits or reserves allowed for all periods up to 31 October 2019. Such payments were to the detriment of HMRC from at least 1 August 2019. In that:

End of year accounts filed at Companies House show that IC has been insolvent from at least 01 November 2016 onwards

Analysis of these end of years accounts shows that The Banned Director paid himself drawings (as dividends) on a yearly basis beyond what SRS’s profits allowed for

Corporation Tax (CT) has been due and payable in full from at latest 1 August 2019 in respect of the accounting period ended 31 October 2018. Since that date CT debt due has increased by at least £32,941

In the period 1 August 2019 onwards The Banned Director withdrew a total of £139,586 from the company outside of normal salary payments.

Value Added Tax (VAT) has been overdue since at least VAT period 10/19, due by 7 December 2019. Since that date the VAT debt due has increased by at least £15,729

On 03 August 2021, SRS went into CVL with liabilities to creditors totalling £83,053

Case 109 – Director disqualification for misuse of a Bounce Back Loan

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

The Banned Director (The Banned Director) caused The Insolvent Company (The Insolvent Company) to trade to the detriment of HMRC from 7 January 2019 as regards VAT and from 22 February 2019 as regards CIS, resulting in liabilities of £300,641.39, in that.

The Insolvent Company incurred Construction Industry Scheme liabilities totalling £180,992 for the period 22 February 2019 to 05 November 2021, against which it made payments of £9,509, leaving a liability of £171,483.

The Insolvent Company incurred VAT Liabilities totalling £140,894.65 for the VAT periods from November 2018 (due for payment on 7 January 2019), against which it made payments of £11,826.26 , leaving a liability of £129,158.39.

At the date of Liquidation HMRC was the Company’s largest creditor, owed £310,962.97 out of liabilities totalling £491,387.58.

During the period from 1 November 2018 to 5 November 2021 The Insolvent Company paid at least £1,134,136 out of its bank account to general trade creditors, subcontractors and in general cheque payments. In the same period £21,335 was paid to HMRC

Case 110 – Director disqualification for accounting matters.

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

The Company Director (The Company Director) failed to ensure that The Insolvent Company (The Insolvent Company) maintained and / or preserved adequate accounting records for the period from 1 April 2019 to 18 August 2021, or in the alternative has failed to deliver up such records to the liquidator. As a result of the failure to deliver up adequate records, it has not been possible to verify:-

 If his statement for the report to creditors that The Insolvent Company provided transportation services of building supplies from Romania between March 2018 until The Insolvent Company’s cessation on 05 March 2021 is a true reflection of The Insolvent Company’s trading history.

 that HMRC assessments for The Insolvent Company’s VAT liability of £1,186 for VAT quarters ending September 2020 to March 2021 and PAYE/CIS of £1,618 are accurate.

 the purpose of the payments made by The Insolvent Company, or to verify that payments were legitimate company transactions, in particular card payments listed as edgware made between 12 December 2019 and 14 August 2020 totalling at least £804,500

 the purpose of the bank transfers made between 18 August 2020 and 21 August 2020 totalling £30,000 to another company marked as refund

 why receipts totalling £840,369 were received into the bank account between 03 January 2020 and 08 April 2021 for which there are no invoices or records and if any money is still owed to The Insolvent Company

 the purpose of net payments totalling £47,559 made to him from the bank account between 06 December 2019 and 14 May 2021 and if this has been correctly accounted to HMRC for tax purposes. Payroll records show his annual wage £12,500 for year end 5 April 2020 and £8,336 for year end 05 April 2021

 whether The Insolvent Company’s turnover qualified it to receive a bounce back loan of £45,000 paid into the bank account on 07 May 2020, and whether the loan was used for the economic benefit of The Insolvent Company.

Case 111 – Director disqualification for trading to the detriment of HMRC

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

Between at least 30 March 2006 and 26 April 2006, The Company Director caused The Dissolved Company to participate in transactions which were connected with the fraudulent evasion of VAT, such connections being something which The Company Director, either knew or should have known about; and

On 31 May 2006, The Company Director caused The Dissolved Company to wrongfully claim the sum of £3,051,538.75 from HM Revenue and Customs (HMRC).

ANNEX

The Company Director was aware of the fact that MTIC DC fraud was rife in the trade in wholesale mobile telephones sector or ought to have been aware of it because:

he and his advisors had been warned of it by HMRC with regard to another company of which he was a director in a letter dated 22 January 2002;

he and his advisors had been warned of it by HMRC with regard to The Dissolved Company, in letters dated 14 October 2003, 14 January 2004, 02 July 2004, 24 November 2005 and 07 December 2005;

HMRC had also referred him to or issued him with, copies of public notices regarding joint and several liability and invalid input tax in letters dated 16 April 2003 and 13 June 2006 with regard to another company of which he was a director;

HMRC had also referred him to or issued him with, copies of public notices regarding joint and several liability and invalid input tax during a visit on 25 September 2003 and in letters dated 01 October 2003 and 24 November 2005 with regard to The Dissolved Company;

he conducted checks with HMRC’s Redhill office demonstrating his understanding of HMRC’s letter to The Dissolved Companydated 14 October 2003 and also demonstrating his acceptance of the need for due diligence on The Dissolved Company’ trading partners.

The trading in which The Dissolved Company was involved had features which put, or should have put, The Company Director on enquiry about the legitimacy thereof, as follows:

The Dissolved Company held an account at the First Curaao International Bank and used that to make payments to and receive payments from its partners yet it also maintained a UK bank account;

The Dissolved Company very quickly and without significant effort or working capital generated huge turnover;

The Dissolved Company was always able to source goods and complete the purchase and onwards sales on the same day, as were all of the other parties in the transaction chains;

The Dissolved Company was always able to sell exactly the same quantities of mobile telephones as it purchased;

The amount of profit made by DC on the transactions in which it was involved reflects a pattern common in MTIC VAT fraud.

Despite being aware of MTIC VAT fraud in DC ’ trade sector and engaging in transactions bearing the features of such fraud, The Company Director failed to ensure that The Dissolved Company carried out effective steps, checks and / or due diligence in respect of its trade and of its trading partners as follows:

some due diligence checks were conducted after the deals in question had been carried out;

negative indicators and / or warnings were ignored;

The Dissolved Company did not keep records of the IMEI numbers of the mobile telephones which it bought and sold;

The Dissolved Company failed to carry out any commercial checks on any of the freight forwarders that it used;

In view of the MTIC hallmarks and failure to take adequate steps to reduce risks of involvement with MTIC trading, The Dissolved Company was not then entitled to offset and reclaim VAT and consequently the reclaim of £3,051,538.75 that DC submitted on 31 May 2006 was wrongful.

The trading chains in which The Dissolved Company was involved, caused significant loss to HMRC:

2 of The Dissolved Company’ suppliers have been wound up and the other 1 has been dissolved;

4 of The Dissolved Company’ customers are suspected by overseas authorities to have undertaken activities connected with VAT fraud and the other 1 has been de-registered after being deemed unreliable;

All 23 of NTS’ broker deals in VAT period 04/06 have been traced back to fraudulent tax losses, with the first 4 tax losses being via a contra trader.

Case 112 – Director disqualification for non-payment of VAT

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

Between 01 August 2018 and 27 February 2020 (date of administration), The Banned Director failed to ensure that The Insolvent Company submitted accurate VAT returns and make payments to HM Revenue and Customs (hereinafter referred to as HMRC) as and when they fell due. In respect CIS taxes, The Insolvent Company failed to make payments as and when they fell due, meaning that The Insolvent Company traded to the detriment of HMRC so that when entering administration, The Insolvent Company had an outstanding liability in respect of VAT of £57,927.83 and in respect of CIS of £75,744.49.

VAT.

 On 10 December 2018, a payment of £10,367.55 was made to cover VAT liabilities for period 09/18. Following this payment, The Insolvent Company’s VAT liabilities were nil.

 A VAT return was submitted on 24 January 2019 for period 12/18 for a total of £16,466.58. Due to non-payment, HMRC applied surcharges of £2,469.98. No payments were made towards this liability.

 A VAT return was submitted on 30 April 2019 for period 03/19 reclaiming £5,860.47. This credit was applied by HMRC to period 12/18.

 An assessment was raised on 17 July 2019 for £23,611.79 (including interests of £1,184.79) for underdeclared VAT returns for periods 06/17, 09/17, and 12/17. No payments were made towards this liability.

 A VAT return was submitted on 05 August 2019 for period 06/19 for a total of £18,201.34. Due to non-payment, HMRC applied charges and interests of £2,923.89. No payments were made towards this liability.

 A final VAT return was submitted on 29 October 2019 for period 09/19 for a total of £500.80. Due to non-payment, HMRC applied interests of £209.48. No payments were made towards this liability.

 On 06 February 2020 charges of £595.56 were withdrawn by HMRC. This credit was applied to period 12/18 resulting in VAT liabilities when entering administration of £57,927.83.

CIS

 On 31 July 2018, The Insolvent Company’s outstanding balance in respect of CIS was £39,842.60

 Between 01 August 2018 and 31 December 2019, with the exception of September 2019, The Insolvent Company submitted 16 CIS returns totalling £42,894.09. No payment was made towards this liability.

 Due to non-payment, HMRC applied surcharges of £334.30. Meaning the liability owed in respect of CIS was £83,070.99. No payment was made towards this liability.

 On 19 January 2019 The Insolvent Company submitted an employment allowance claim of £7,326.50. This credit was applied by HMRC to the CIS outstanding balance, resulting in CIS liabilities when entering administration of £75,744.49.

Comparative treatment

Review of bank statements between 01 August 2018 and 27 February 2020 show The Insolvent Company received income of £1,126,080.15. During the same period, £1,311,691.83 was paid out of The Insolvent Company’s bank account of which £30,997.91 was paid to HMRC.

Case 113 – Director disqualification for

Director Disqualified for 10 years by Order of the Court.

The Banned Director (The Banned Director) caused The Insolvent Company Limited (The Insolvent Company) to apply for a Bounce Back Loan of £50,000 on 7 August 2020 when she knew or ought to have known that The Insolvent Company was not eligible for the loan, with the funds being used for the benefit of a connected company. In that:

On 6 August 2020 a Bounce Back Loan was applied for in the name of The Insolvent Company. A declaration was made that The Insolvent Company met the eligibility criteria for the loan. The company turnover declared on the application form for 2019 was £200,00.

On 7 August 2020 £50,000 loan was paid into The Insolvent Company’s bank account.

Between 13 August 2020 to 22 October 2020 the £50,000 was transferred to a connected company.

To be eligible for a Bounce Back Loan, The Insolvent Company was required to have been engaged in trading or commercial activity on 01 March 2020. Bank statements for the company show no transactions before August 2020. The Director stated to Insolvency Service that the company had ‘no established trade’

The Insolvent Company was not eligible for the Bounce Back Loan Scheme, as it had no trading turnover, was not engaged in trading or commercial activity at the date of the application, and the loan was not used to provide economic benefit to the business.

At the time of liquidation, the Bounce Back Loan of £50,000 had not been repaid

Case 113 – Director disqualification for breaching the terms of the BBL Scheme

Director Disqualified for 10 years by a director signed undertaking.

a) On 26 August 2020 The Banned Director (The Banned Director) caused The Insolvent Company (the Company) to apply for and obtain a Government backed Bounce Back Loan (BBL) totalling £50,000. The application was contrary to the eligibility terms and the Company did not use it in its entirety for the economic benefit of the business, contrary to the terms of the BBL. In that:

Application for BBL

 prior to 26 August 2020 he applied to Barclays Bank via their online system for a BBL which was credited to the Company’s bank account on 26 August 2020;

 the last filed accounts as at 31 July 2019 show turnover of £155,399 and accumulated losses of £74,090 resulting in negative equity of £73,990, contrary to the eligibility requirements for a BBL

 The Company’s turnover, either in the last accounts or through moneys placed in the company bank accounts from 1 August 2019 (totalling £121,398) did not reach the threshold of £200,000 for seeking a bounce back loan of £50,000;

Use of BBL funds

 on or around 09 October 2020, the Company commenced transferring the income received from Just Eat to an unknown Company and by the end of October 2020 credits from the sale of food were no longer being paid into the Company’s bank account;

 on 16 October 2020 the Company paid the sum of £10,500 to the Dissolved Company (DC) and a further £10,500 was paid to DC on 30 October 2020. DCis the landlord of the restaurant building and this sum exceeded the usual rent paid to DC;

 on 02 November 2020 the Company paid the sum of £13,000 to LC Assets and a further sum of £13,000 was paid to LC on 06 November 2020, both sums for the payment of improvements to the Company’s premises. LC is a company which was under the ownership of the Company’s landlord, LC and these payments were not for the benefit the Company which had, in effect and reality, ceased trading;

 the Statement of Affairs as at 07 May 2021 refers to improvements in premises amounting to £20,699 as an asset of the Company. No sum has been repaid in the liquidation and a successor business, T, is still trading at these premises under a different name having benefitted from the improvements.

1. B) He caused the Company to receive business grants totalling £29,221 from the local Council after trading had ceased and he had paid fees for an intended liquidation. From 18 February 2021 he caused the dissipation of the moneys by way of paying existing and future rent and cash extractions. These transactions were in anticipation of the winding-up and were to the detriment of the local council and benefit of entities other than the Company. In that:

 On 28 January 2021, having met with P (the Liquidator), the decision was taken to place the Company into liquidation and the sum of £6,000 was paid to the Liquidator by the Company to cover their fees. At this time the Company should have ceased all operations and/or transactions;

 between 18 February 2021 and 22 April 2021 business grants were received by the Company from London Borough of Tower Hamlets totalling £29,221.57;

 between 19 February and 24 February 2021 the sum of £13,950 was withdrawn from the Company’s bank account in cash;

 on 29 April 2021 a cheque in the sum of £13,500 payable to AIC was paid to cover rent of the restaurant after the Company has ceased to trade.

Case 114 – Director disqualification for trading to the detriment of HMRC and disguised remuneration

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

Between 15 December 2017 and 8 January 2018, I caused The Insolvent Company to use the sale proceeds of its main asset to pay £3,216,000 to associated companies , which was to the risk and ultimate detriment of HMRC who had been conducting an investigation since December 2015 into The Insolvent Company’s use of a Remuneration Trust Scheme. By 15 December 2017 HMRC had issued assessments totalling £568,611.65 which had increased by the date of liquidation.

Knowledge of HMRC liability

Between 29 January 2016 and 15 December 2017 HMRC issued Regulation 80 determinations in respect of PAYE and Corporation Tax assessments totalling £568,611.65

After each determination or assessment The Insolvent Company exercised its right of appeal disputing HMRC’s assessment, and so I knew or ought to have known that HMRC’s claim could result in a liability.

Sale of Business

On 8 December 2017 I signed a sale agreement with a purchaser on behalf of the company selling future income rights in consideration of a payment by the purchaser of £3,416,125

On 15 December 2017 The Insolvent Company received a sum of £3,416,125 by bank transfer.

From 8 January 2018 onwards the company did not receive any trading income and total income of just £2,600.

Transactions

As at the close of business on 15 December 2017, The Insolvent Company had cash at bank of £3,582,905.79.

On 18 December 2017 The Insolvent Company made payments to 2 companies associated with the directors totalling £3,000,000 .

On 27 December 2017 The Insolvent Company made payments to 2 companies associated with the directors totalling £216,000.

There are no documents in the accounting records of The Insolvent Company to explain the reason for the payments to the associated companies and they were not recorded as creditors in the Statement of Affairs.

As a result of these transactions, I caused The Insolvent Company to have insufficient capital to satisfy the contingent liability to HMRC at a time when there was no prospect of The Insolvent Company obtaining future income to satisfy that liability when it became due.

Case 114 – Director disqualification for trading to the detriment of the crown

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

From at least May 2017 to 11 September 2020, the date of liquidation, The Banned Director failed to ensure The Insolvent Company (The Insolvent Company) made payments to HM Revenue and Customs (HMRC) as and when they fell due in respect of VAT, PAYE/NIC/CIS and Corporation Tax (CT) and traded to the detriment of HMRC, so that at the date of liquidation, The Insolvent Company had an outstanding liability of at least £317,126.06 in respect of VAT, PAYE/NIC and Corporation Tax:

VAT

 The Insolvent Company was incorporated on 21 March 2013. Application for VAT registration was made to HMRC on 3 March 2018 and stated that the company’s VAT registration should be backdated to 1 January 2015.

 A penalty for non-registration of VAT from 1 January 2015 to 31 December 2018 was issued on 4 July 2019 for £55,873.00. No payment was made against this penalty.

 Returns were submitted for the periods 03/19, 06/19, 09/19, 12/19, 03/20 and 06/20. The Insolvent Company returns for these six periods total £65,263.09. No payments were made against the returns for these periods.

 Assessments were raised for the period prior to registration and periods 12/18 and 09/20, totalling £49,964.00. No payments were made against these assessments.

 For the entire period, no payments were made to the building VAT liability.

 The Insolvent Company total VAT liability outstanding at liquidation is £171,100.09.

PAYE/NIC/Corporation Tax

 For the year 2015/2016 HMRC submitted a claim for £4.57 with regards to interest

 For the year 2016/2017, a claim of £38.81 with regards to interest was applied. PAYE Returns of £8,035.39 were submitted and HMRC corrected this to an additional £20,839.63

 For the year 2017/2018, a claim of £2,675.59 was submitted comprising £2,617.26 PAYE/NIC and £58.33 interest. PAYE returns of £6,222.06 were submitted and HMRC corrected this to an additional £22,910.28.

 For the year 2018/2019 a claim of £7,655.55 for PAYE/NIC was submitted. PAYE returns of £7,655.55 were submitted and HMRC corrected this to an additional £16,790.01.

 For the year 2019/2020 a claim of £19,331.37 for PAYE/NIC was submitted.

 For the year 2020/21, a claim of £3,257.49 comprised of PAYE/NIC was submitted.

 A further £3,987.10 of interest was applied by HMRC.

 Claims regarding Corporation Tax were submitted by HMRC for the following periods: £20,608.91 for 2016/17, £31,507.77 for 2017/18 and a £200 penalty for 2018/19. £636.22 was remitted for the 2015/16 period.

 No payments were made towards these liabilities so as at the date of Liquidation a total of £146,025.97 of PAYE/NIC and Corporation Tax remained outstanding to HMRC.

Comparative Treatment.

 Accounts registered at Companies House for the year ending 31 March 2018 show bank loans of £63,260, trade creditors of £760, other creditors of £5,136, Corporation Tax of £32,134 and Tax and Social Security of £62,560.

 Accounts registered at Companies House for the year ending 31 January 2019 show bank loans of £46,697, other creditors of £5,133, and Tax and Social Security of £235,665

 Accounts for year ending 31 January 2020 show bank loans of £nil, other creditors of £5,134 and Tax and Social Security of £274,873.

 From 1 Feb 2020 to 11 September 2020, the date of liquidation, £nil was paid to HMRC, £61,483.24 was paid to the directors and £99,259.36 was paid to all other classes of creditors.

 At Liquidation HMRC submitted a claim for £320,476.94 with all other known creditors totalling £242,021.51.

Case 115 – Director disqualification for accounting issues

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

From 01 November 2018 to liquidation the director failed to maintain, preserve and/or deliver up adequate accounting records with the result that it is not possible to determine:

the true asset position of The Liquidated Company, whether all creditors have been accounted for, whether all creditors have been treated fairly and The Liquidated Company’s true liability to HM Revenue & Customs (HMRC);

whether cash withdrawals of £61,858 made between 01 November 2018 and 17 January 2020 were for the benefit of The Liquidated Company;

whether payments made between 10 April 2019 and 09 December 2019 totalling £27,360 re ‘Cheshunt client and/or deposit’ were for the benefit of The Liquidated Company.

O’Mahoney failed to ensure that The Liquidated Company met its financial and filing commitments as regards and Construction Industry Scheme (CIS) between 19 November 2015 to October 2019 and Value Added Tax (VAT) between May 2018 and October 2019. In that:-

The Liquidated Company traded from October 2015 to October 2019 in the scaffolding industry;

In respect of CIS, The Liquidated Company’s first return should have been filed by 19 November 2015 but The Liquidated Company failed to submit any CIS returns throughout trading. By liquidation there were 49 CIS returns outstanding. Penalties were issued for non-filing of the returns totalling £1,300;

The Liquidated Company failed to make any payment to HMRC in respect of its CIS liabilities;

The Liquidated Company’s bank statements for the period 28 November 2016 to 05 February 2020 show payments of at least £1,218,873.44 for the payment of sub-contractor wages in which no CIS returns were filed;

The Liquidated Company’s bank statements show that between 20 February 2017 and 20 January 2020, O’Mahoney received the sum of £48,036.06 on which no PAYE/NIC deductions were made and . It is not known if he was an employee or subcontractor of The Liquidated Company;

the last payment made by The Liquidated Company to HMRC was £7,536.32 on 07 December 2017 in respect of the VAT return for the quarter ending November 2017;

The Liquidated Company’s bank statements show that between 28 November 2017 and 27 January 2020, credits were received into the bank account totalling £2,871,062.76;

following submission of the VAT return for the quarter ending February 2018 in the sum of £4,574.60 The Liquidated Company failed to make any payments to HMRC in respect of VAT for that and subsequent submissions;

at liquidation, HMRC has submitted a claim in relation to VAT in the sum of £24,910.08 covering 6 returns up to the quarter ending May 2019 plus surcharges of £4,524.02.

The amount due to HMRC in respect of CIS cannot be quantified due to the lack of returns and no books and records.

Case 116 – Director disqualification for trading to the detriment of the crown

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

Between 07 September 2015 and 05 June 2019, the date of liquidation,

The Banned Director (The Banned Director) caused The Insolvent Company Limited (The Insolvent Company) to trade to the detriment of HM Revenue & Customs (HMRC) in respect of value added tax (VAT) resulting in a liability of £82,449 (excluding surcharges) at liquidation. In that:

 The Insolvent Company commenced trading in January 2013 and was registered for VAT with effect from 01 April 2014;

 The Insolvent Company submitted VAT returns for the 4 quarters ended

30 April 2015 on 08 March 2017 showing a total VAT liability of £21,098. This liability was finally settled late on 06 June 2017;

 On 08 March 2017 a VAT return was submitted late for the VAT quarter ended 31 July 2015 declaring VAT due of £4,714. Payments totalling £3,862 were made against this liability leaving VAT of £852 overdue from 07 September 2015 outstanding in the liquidation;

 On 29 March 2017 a time to pay arrangement was agreed of which payments totalling £18,237 were made in respect of historical liabilities due prior to 07 September 2015;

 The last payment for VAT was made on 14 November 2017;

 A further 13 VAT returns, all submitted late, disclosed a total VAT liability of £81,597, were submitted for the subsequent VAT quarters, the last being the period ending 31 October 2018;

 A VAT return for the quarter ended 31 January 2019 showed a repayment due of £31;

 A final VAT return for the quarter ended 30 April 2019 was submitted showing a nil liability;

 Accounts for year ended 31 January 2016 showed The Insolvent Company had liabilities to trade and other creditors totalling £23,199 and tax totalling £39,800. At liquidation, tax had increased by £54,443 to £94,243

(of which £87,660 relates to VAT and surcharges) whereas other creditors and trade had decreased by £9,803 to £13,396;

 At liquidation on 05 June 2019, HMRC were owed £87,660 in respect of VAT and surcharges.

Case 117 – Director disqualification for misapplication for a Bounce Back Loan

Director Disqualified for 4 years by Order at trial.

On 9 June 2020 The Banned Director caused The Liquidated Company to apply for a Bounce Back Loan (BBL) of £50,000 using overstated turnover figures in the loan application form. Consequently, The Liquidated Company received more monies than it was entitled to from the BBL scheme. In that:

On 9 June 2020 BDA obtained a BBL of £50,000 despite its turnover for the period 18 July 2018 to 31 July 2019 being only £24,414, according to accounts which were filed at Companies House on 16 April 2020. Turnover for the year 31 July 2020 was £22,216, according to accounts which were filed at Companies House on 28 April 2021. 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 calendar year 2019.

On 23 September 2021 BDA entered into creditors’ voluntary liquidation with liabilities of £50,044 including £50,000 which is owed to in respect of the BBL.

Case 117 – Director disqualification for antecedent transactions

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

Between 10 June 2020 and 12 June 2020 The Banned Director (The Banned Director) caused the Liquidated Company (LC) to make payments totalling £10,000 that were to the benefit of connected parties and to the detriment of LC’s creditors generally, at a time when he knew, or ought to have known, that LC was insolvent, in that:

On 23 December 2019 HMRC wrote to LC warning of winding up action if outstanding tax liabilities of £63,937 were not paid in full or contact not made by the company by 31 December 2019. LC failed to contact HMRC in respect of the letter or make any payments towards the outstanding tax debt.

In the Spring of 2019, LC commenced a new contract which ran into difficulties after three months resulting in an ongoing contract dispute between the parties. The client believed they had paid monies for works which were not completed whilst LC’s position was that due to contract variations and delays caused by the client they were owed monies in respect of the contract.

On 13 March 2020, The Banned Director contacted an Insolvency Practitioner to discuss the financial position of the LC after receiving advice from a solicitor that LC would be unable to afford to defend any claim brought by the client in respect of the ongoing contract dispute.

LC  received correspondence dated 19 May 2020 from a solicitor representing the client who was in contract dispute with the company. The letter set out the client’s intentions of pursuing a claim against LC for overpayment and damages. The client submitted a claim in the liquidation for £326,837.

On 08 June 2020, LC applied for a government backed bounce back loan which resulted in £20,600 being paid into LC’s bank account on 09 June 2020.

Between 10 June and 12 June 2020, LC paid £5,000 to The Banned Director’s relative and £5,000 to a friend of The Banned Director’s in respect of money previously borrowed by the company. The remaining loan funds were used to repay sub-contractors and pay other trade expenses.

At the time of making the BBL application, LC had no recorded assets and known liabilities of at least £63,937, owed to HMRC.

On 18 June 2020 The Banned Director advised the Insolvency Practitioner that he believed LC did not have the resources to contest the customer claim and instructed them to place the company into liquidation.

LC was placed into liquidation on 28 July 2020.

Case 118 – Director disqualification for accounting issues

Director Disqualified for 5 years by Court Order.

The Company Director (The Company Director) failed to ensure that The Insolvent Company (IC) maintained and /or preserved adequate accounting records or, alternatively, failed to deliver up to the liquidator such records as were maintained. As a result, it has not been possible to determine;

That IC was trading on 01 March 2020 and therefore eligible to apply for a Bounce Back Loan (BBL) at all.

That, following receipt of BBL funds of £50,000 on 13 May 2020 the £50,000 withdrawn in cash between 26 May 2020 and 15 July 2020 was used for the legitimate trading expenses and economic benefit of IC and not for personal use, as per the terms of the BBL scheme.

Case 119 – Director disqualification for non-payment of taxes due

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

Between at least July 2014 and liquidation on 21 November 2019 The Company Director caused The Liquidated Company to trade to the detriment of HM Revenue & Customs (HMRC) in regard to Value Added Tax (VAT) due for payment from 7 July 2014 and Corporation Tax (CT) due for payment from 1 January 2016. Since at least April 2018 The Company Director has withdrawn funds from the company for her own benefit and as a result the company became unable to meet its financial commitments to HMRC.

VAT

Between April 2014 and March 2018 the company was liable to pay VAT of £160,833. Payments totalling £120,799 were made leaving a balance of £40,034 VAT outstanding as at March 2018. In addition interest and penalties totalling £17,486 were due.

Between April 2018 and liquidation in November 2019 a further £56,831 VAT became due. Payments totalling £4,500 were made leaving a further balance of £52,331 VAT outstanding. In addition further interest and charges of £6,292 were applied.

At liquidation in November 2019 the VAT debt was £92,365 plus interest, penalties and charges of £23,778. Total £116,143.

CT

Between April 2014 and March 2018 the company was liable to pay Corporation Tax of £159,486 plus interest and penalties of £21,013. Payments totalling £32,856 were made during this period leaving a balance of £126,630 unpaid in April 2018.

Between April 2018 and liquidation in November 2019 no further payments of Corporation tax were made and the balance of £126,630 remains unpaid.

Differential Treatment

At liquidation on 21 November 2019 HMRC were the majority creditor being owed £257,984 whilst other creditors were owed £49,001. The accounts for year ending 31 March 2018 reflect HMRC were owed £142,092 compared to other creditors being owed £34,126.

Between April 2018 and liquidation in November 2019 The Company Director received remuneration in the form of wages and dividends totalling £27,554. In addition to this she transferred a total of £171,367 from two company bank accounts into her personal bank accounts. The Company Director also received £17,494 for her personal benefit.

Case 120- Director disqualification for failing to meet tax obligations

Director Disqualified for 3 years by a director signed undertaking.

The Banned Director failed to ensure that The Insolvent Company complied with its statutory obligations to file VAT returns and make timely payments for VAT to HMRC from 8 June 2018 and for PAYE/NIC from 5 April 2019. In addition he caused The Insolvent Company to trade to the detriment of HMRC in respect of VAT from 7 March 2019 and in respect of PAYE/NIC/CIS from at least 5 April 2019 to cessation of trading on 30 April 2020. As a result HMRC were owed a total of £77,793.04 to 30 April 2020. In that:

VAT

 The company registered for VAT on 27 March 2018 and no VAT returns were submitted to HMRC by The Insolvent Company.

 In the absence of VAT returns HMRC raised auto assessments, the first three auto assessments were paid for 04/18,07/18 and 10/18. The last payment to HMRC in respect of VAT was on 17 January 2019.

 The payment for quarter ending 01/19 was due 7 March 2019, however The Insolvent Company failed to make any payments made against any other quarters to HMRC.

 At Liquidation HMRC had a claim for 5 quarters from 01/19 to 01/20 outstanding of £17,694.55 based on auto assessments.

CIS AND PAYE/NIC:

 No RTI returns were filed as they fell due and no payments of PAYE were made by The Insolvent Company to HMRC with PAYE outstanding for the year ended 5 April 2020 for which The Insolvent Company submitted an end of year update on 22 April 2020 as the amounts assessed by HMRC were £12,304 lower that the amount due.

 The Insolvent Company failed to pay CIS as it fell due with liabilities outstanding from 5 December 2017, with no payments made in respect of CIS by The Insolvent Company since 4 March 2019.

 As a result PAYE and CIS outstanding to 5 May 2020 totalled £56,606.49.

 At Liquidation HMRC had a claim of £66,482.23, comprising of £54,644.66 for CIS and £11,837.57 for PAYE.

OTHER CREDITORS

 At Liquidation on 12 October 2020 HMRC had a claim of £94,146, in comparison other creditors totalled £33,217 (comprising of trade creditors of £4,387.94 and employees of £28,828.78).

 Accounts were not produced for The Insolvent Company but incomplete bank statements for his personal bank account used by RAMA for the period 7 March 2019 to 30 March 2020 (the last date of the bank statements provided by him) show bank credits of £417,686 from which no payments were made to HMRC.

Case 121- Director disqualification for misappropration of BBL funds

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

The Banned Director (The Banned Director) caused The Liquidated Company (The Liquidated Company) to apply for a Bounce Back Loan (BBL) of £22,000, received on 15 July 2020, to which The Liquidated Company was not entitled as the company did not meet the eligibility requirements of the BBL scheme. Further, from these funds incorrectly obtained The Banned Director himself received payments totalling £13,200.

On 10 July 2020 The Banned Director applied on behalf of The Liquidated Company for a BBL of £22,000.

In order to be eligible to apply for a BBL a company had to be engaged in trading or commercial activity in the UK at the date of the application, and also had to have been carrying on business on 01 March 2020 and been adversely affected by coronavirus (COVID-19).

However The Liquidated Company’s annual accounts filed at Companies House show that the company was dormant throughout the period from incorporation on 20 July 2017 until 31 July 2020. The receipt of the BBL funds totalling £22,000 on 15 July 2020 was the first transaction on The Liquidated Company’s only known bank account.

Between 04 September 2020 and 04 July 2021 The Banned Director received payments totalling £13,200.

The Liquidated Company entered liquidation on 21 October 2021 with outstanding liabilities to other creditors totalling £23,795, including the full amount of the BBL improperly received.

Case 122 – Director disqualification for employment of illegal workers

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

The Banned Director (The Banned Director) breached his duties as a director of The Insolvent Company (The Insolvent Company) by failing to ensure that it complied with its statutory obligations under The Immigration, Asylum and Nationality Act 2006, resulting in the employment of illegal workers.

Home Office Immigration Enforcement (HOIE) officers visited the trading premises on 04/10/2018 and issued a Notification of Liability for a Civil Penalty of £30,000 in respect of the employment of three illegal workers, payment of which was due on or before 02/04/2019.

HOIE officers visited the trading premises on 18/01/2019 and issued a Notification of Liability for a Civil Penalty of £45,000 in respect of the employment of three illegal workers, payment of which was due on or before 25/07/2019.

– One of the illegal workers encountered on this occasion was also employed illegally by The Insolvent Company at the visit to the trading premises that took place on 04/10/2018.

HOIE officers visited the trading premises on 14/11/2019 and issued a Notification of Liability for a Civil Penalty of £20,000 in respect of the employment of one illegal worker, payment of which was due on or before 08/01/2020.

The Banned Director was the appointed director of the company at the time of each of the breaches of the Immigration, Asylum and Nationality legislation.

At the date of the liquidation The Insolvent Company had not paid any of the fines due to HOIE.

Case 123- Director disqualification for not paying due tax

Director Disqualified for 6 years by a director signed undertaking.

The Banned Director failed to ensure The Insolvent Company submitted returns when due to HM Revenue & Customs (HMRC) and failed to ensure The Insolvent Company made payments when due to HMRC in respect of VAT thereby causing or allowing The Insolvent Company to trade to the detriment of HMRC from 1st January 2013 to 5th February 2019, resulting in a liability of £904,353.17 to HMRC at the date of the liquidation in that:

 The Insolvent Company was incorporated on 26 October 2011 and on 1st June 2012 completed VAT registration paperwork for HMRC stating an estimated turnover of £80,000 per annum.

 No VAT returns were submitted between registration and Liquidation resulting in assessments being raised totalling £904,353.17. No payments were made.

 Company bank statements show that between September 2016 and February 2019 £2,286,723.89 was deposited into the company bank account, of this sum he received at least £84,362.91 either directly or for his benefit, at least £1,074,357.91 was paid to trade suppliers, £165,575.12 paid in wages and £985,145.42 in other outgoings. During the same period no payments were made to HMRC in respect of VAT.

 The accounts for the year ended 31 July 2017 show creditors to be HMRC for £79,376, trade creditors £59,016, banks £8,832 and other creditors £81,634

 The Statement of Affairs signed by him on 12 February 2019 shows HMRC (VAT) as a creditor for £653,727, trade creditors as £44,336, banks as £11,368 and other creditors in the sum of £15,000. In comparison, and with reference to sums owed to creditors according to the accounts for year ended 31 July 2017, the debt to HMRC increased by £855,297 during this period, debts to trade creditors decreased by £16,680 during this period, debts to banks increased by £2,536 and debts to other creditors decreased by at least £66,634 during the relevant period.

 At cessation of trade HMRC was The Insolvent Company’s largest creditor with debts totalling £934,673 (including interest and Corporation Tax) of The Insolvent Company’s total liabilities of £1,005,377.90.

Case 124- Director disqualification for misuse of the BBL Scheme

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

On 30 May 2020, The Company Director (The Insolvent Company) caused The Company Director Limited (SDL) to breach the conditions of the Bounce Back Loan (BBL) scheme by applying funds totalling £43,750, obtained under the BBL scheme for his personal benefit and not for the economic benefit of SDL. In that:

 On 15 May 2020, the director applied for a BBL in the sum of £43,750 that was subsequently credited to the Company’s bank account on 22 May 2022.

 On 30 May 2022, the sum of £50,000 was transferred to the director’s personal account.

 No explanation or proof has been provided by the director to show that the Bounce Back Loan/  BBL proceeds were used for the economic benefit of the underlying business and was therefore contrary to the purpose of the BBL support scheme.

 The Company failed to make a single repayment in respect of the outstanding Bounce Back Loan.

Failure to maintain and deliver up adequate books and records

failed to ensure that the company maintained and / or preserved adequate accounting records, or in the alternative has failed to deliver up such records to the Liquidator. As a result of the failure to maintain, preserve and or deliver up adequate records, it is not possible to verify;

 Details of the payroll records for the two employees on a month-by-month basis ensuring the right amount of tax that may have been payable.

 What the monthly entry to Sainsbury’s bank for £739.45 related to

 An explanation as to what the cash withdrawals of £8,029 for the year ending 30/04/20 and £5,059 for the year ending 30/04/21 relate to;

 The actual amount outstanding on the director’s loan account.

Case 125- Director disqualification for accounting problems

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

The Company Director (The Company Director) failed to ensure that The Insolvent Company (IC) maintained and/or preserved adequate accounting records from at least 01 March 2020 to 19 May 2021, the date of liquidation, or in the alternative, he has failed to deliver them up to the Liquidators. As a result, it has not been possible to determine:

ICs true asset position;

The amount of income generated by IC and the nature of its disposal;

Whether IC was entitled to Bounce Back Loan (BBL) monies totalling £25,000 received on 20 January 2021;

The purpose of payments made by IC, or to verify that payments were legitimate company transactions and that BBL funds were used appropriately for the economic benefit of IC in accordance with the terms of the BBL scheme; in particular payments totalling £27,713 made between 22 January 2021 and 26 February 2021;

The nature and extent of transactions with, or benefiting, The Company Director, or confirm the final position between The Company Director and SJResource, including whether The Company Director is a creditor or debtor of IC;

Determine IC true tax position and details of outstanding tax liabilities to HM Revenue & Customs.

Case 126- Director disqualification for withholding VAT payments due to HMRC

Director Disqualified for 9 years by Order at trial.

From at least May 2017 to 11 September 2020, the date of liquidation, The Banned Director (The Banned Director) failed to ensure The Insolvent Company (The Insolvent Company) Ltd The Insolvent Company (The Insolvent Company) Ltd (The Insolvent Company) made payments to HM Revenue and Customs (HMRC) as and when they fell due in respect of VAT, PAYE/NIC/CIS and Corporation Tax (CT) and traded to the detriment of HMRC, so that at the date of liquidation, The Insolvent Company had an outstanding liability of at least £317,126.06 in respect of VAT, PAYE/NIC and Corporation Tax.

VAT

 The Insolvent Company was incorporated on 21 March 2013. Application for VAT registration was made to HMRC on 3 March 2018 and stated that the company’s VAT registration should be backdated to 1 January 2015.

 A penalty for non-registration of VAT from 1 January 2015 to 31 December 2018 was issued on 4 July 2019 for £55,873.00. No payment was made against this penalty.

 Returns were submitted for the periods 03/19, 06/19, 09/19, 12/19, 03/20 and 06/20. The Insolvent Company returns for these six periods total £65,263.09. No payments were made against the returns for these periods.

 Assessments were raised for the period prior to registration and periods 12/18 and 09/20, totalling £49,964.00. No payments were made against these assessments.

 For the entire period, no payments were made to the building VAT liability.

 The Insolvent Company total VAT liability outstanding at liquidation is £171,100.09.

PAYE/NIC/Corporation Tax

 For the year 2015/2016 HMRC submitted a claim for £4.57 with regards to interest.

 For the year 2016/2017, a claim of £38.81 with regards to interest was applied. PAYE Returns of £8,035.39 were submitted and HMRC corrected this to an additional £20,839.63.

 For the year 2017/2018, a claim of £2,675.59 was submitted comprising £2,617.26 PAYE/NI and £58.33 interest. PAYE returns of £6,222.06 were submitted and HMRC corrected this to an additional £22,910.28.

 For the year 2018/2019 a claim of £7,655.55 for PAYE/NIC was submitted. PAYE returns of £7,655.55 were submitted and HMRC corrected this to an additional £16,790.01.

 For the year 2019/2020 a claim of £19,331.37 for PAYE/NIC was submitted.

 For the year 2020/21, a claim of £3,257.49 comprised of PAYE/NIC was submitted.

 A further £3,987.10 of interest was applied by HMRC.

 Claims regarding Corporation Tax were submitted by HMRC for the following periods: £20,608.91 for 2016/17, £31,507.77 for 2017/18 and a £200 penalty for 2018/19. £636.22 was remitted for the 2015/16 period.

 No payments were made towards these liabilities so as at the date of Liquidation a total of £146,025.97 of PAYE/NIC and Corporation Tax remained outstanding to HMRC.

Comparative Treatment

 Accounts registered at Companies House for the year ending 31 March 2018 show bank loans of £63,260, trade creditors of £760, other creditors of £5,136, Corporation Tax of £32,134 and Tax and Social Security of £62,560.

 Accounts registered at Companies House for the year ending 31 January 2019 show bank loans of £46,697, other creditors of £5,133, and Tax and Social Security of £235,665.

 Accounts for year ending 31 January 2020 show bank loans of £nil, other creditors of £5,134 and Tax and Social Security of £274,873.

 From 1 Feb 2020 to 11 September 2020, the date of liquidation, £nil was paid to HMRC, £61,483.24 was paid to the directors and £99,259.36 was paid to all other classes of creditors.

 At Liquidation HMRC submitted a claim for £320,476.94 with all other known creditors totalling £242,021.51.

Case 126 – Director disqualification for misuse of the BBL Scheme

Director Disqualified for 10 years by a signed undertaking of the director.

The Banned Director (The Banned Director) caused The Liquidated Company LLP (The Liquidated Company) to apply for a Bounce Back Loan (BBL) of £50,000 on 13 May 2020 using overstated turnover figures in the application form. Consequently, The Liquidated Company received more monies than it was entitled to from the BBL scheme, in that:

On 13 May 2020 The Liquidated Company obtained a BBL of £50,000 which it was not entitled to. 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 Liquidated Company’s turnover was stated as £200,000.

Accounts submitted to Companies House show that The Liquidated Company’s income for the YE 30.09.2016 was £50,110 in YE 30.09.2017, was £86,219 and in YE 30.09.2018 was £88,770.

Bank Records show The Liquidated Company’s income between 06 March 2019 and YE 30.09.2019 was £75,922.71, in YE 30.09.20 it was £74,665 and in YE 22.03.21 it was £44,400.

Bank Records show in calendar year 2019 The Liquidated Company generated an income of £92,228 allowing a BBL of £23,000. As a result The Liquidated Company received £27, 000 more than it was entitled to under the BBL scheme

On 22 May 2020 The Liquidated Company used the BBL to repay a third-party loan for which the directors held guarantees of £47,330.

On 22 March 2021 The Liquidated Company entered liquidation with total liabilities of £63,641, of which £43,632 was the BBL.

Case 127- Director disqualification for misuse of a Bounce Back Loan

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

On 17 December 2020, The Company Director (The Company Director) obtained on behalf of the The Insolvent Company (the Company) a Government backed Bounce Back Loan (BBL) totalling £50,000. At least £39,191 of the BBL funds were not used in their entirety for the economic benefit of the Company or in the spirit of the BBL scheme. In particular:

 On 16 December 2020, he applied for a Government BBL in the sum of £50,000.

 On 17 December 2020, the BBL funds of £50,000 were paid into the Company’s bank account.

 Between 8 and 11 January 2021 sums totalling £39,191 were paid out of the Company bank account under the reference TTB., a company which specialised in converting camper vans

 He has failed to provide an adequate explanation in respect of these payments, there are no records explaining or revealing such transactions and he did not declare any asset purchased with these funds in the Statement of Affairs.

 The Statement of Affairs recorded assets totalling £3,750 as at 28 May 2021.

 The BBL remained outstanding in the total sum of £50,000 on liquidation.

2.

He failed to ensure that the Company maintained and/or preserved adequate accounting records or alternatively, he failed to deliver them up to the Liquidator despite requests that he should do so. As a consequence, in respect of the period from 01 February 2020 until liquidation on 08 June 2021, it has not been possible to:

 explain or verify what payments totalling £39,191 with reference TTB related to and whether these transactions were used for the commercial benefit of the Company;

 explain and verify payments with reference to him totalling at least £28,870.86;

 explain and verify payments to connected parties totalling £15,200;

 verify the accuracy of the Statement of Affairs; or

 confirm that all assets were delivered up in the liquidation.

Case 128 – Director disqualification for misuse of a BBL

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

On or around 07 July 2020 the Company Director caused The Insolvent Company and the Insolvent Company Services Ltd to apply for a Bounce Back Loan (BBL) of £15,000 and to breach the terms of the Bounce Back Loan BBL scheme by disposing of £14,962 of the BBL funds to himself, which was not for the economic benefit of the company, resulting in a loss to the bank of £15,000; and failed to give notice to the bank and HMRC of the dissolution of The Insolvent Company as required by Section 1006 of the Companies Act 2006

Under the Bounce Back Loan 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 they are able and intend to complete timely repayments in future.

The Insolvent Company received a Bounce Back Loan of £15,000 on 07 July 2020 and transferred £14,962 to The Company Director on the same day.

On 18 September 2020 The Company Director submitted an application to dissolve The Insolvent Company.

The Insolvent Company was dissolved on 15 December 2020.

The Insolvent Company failed to give notice to the bank and HMRC, who are owed at least £15,000 and £19,537 respectively, of its application for dissolution, as required by Section 1006 of the Companies Act 2006.

Case 129- Director disqualification for erroneously applying for a bounce back loan

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

On 11 September 2020, The Banned Director caused The Liquidated Company to apply for a government backed Bounce Back Loan (BBL) totalling £50,000 for which it was not eligible and did not use it in its entirety for the economic benefit of the business, contrary to the terms of the BBL. In that:

Eligibility

The Company applied for a BBL of £50,000 on 11 September 2020.

The Company received a BBL of £50,000 into its bank account on 14 September 2020.

In order for the Company to be eligible for such a BBL its turnover was required to be at least £200,000. The Banned Director stated in his application that the turnover was £210,000.

No accounts have ever been filed at Companies House or evidence provided by way of bank statements to show that the Company had ever traded.

Use of funds

On 14 September 2020 the sum of £50,000 was paid into the Company’s bank account.

Between 18 September 2020 and 21 July 2021 payments were made totalling £11,090.20 using the Company’s debit card, predominantly to retail stores and eating establishments.

Between 30 September 2020 and 18 June 2021, the sum of £18,085 was transferred to the personal account of The Banned Director.

Between 06 October 2020 and 04 February 2021, payments totalling £5,000 were made to the wife of The Banned Director.

Between 13 April 2021 and 01 September 2021 payments were made by direct debit totalling £2,139.35.

On 01 September 2021 the company bank account was closed with a residual credit balance of £12,952.09. This sum was not forwarded to the Liquidator.

No evidence has been provided to show that any of the BBL proceeds were used for the economic benefit of the Company.

Apart from bank statements covering the period 01 September 2020 to 01 September 2021, The Banned Director has failed to ensure that The Liquidated Company maintained or preserved accounting records or alternatively has failed to deliver up all such that did exist to the Liquidator. As a result it has not been possible to:

Ascertain when or if the Company commenced trading.

Any business expenditure occurred prior to 01 September 2020.

How the projected turnover of £210,000 was justified.

Following receipt of the BBL of £50,000 if any of the proceeds were spent for the economic benefit of the Company.

What happened to the sum of £12,092.09 following the closure of the company bank account and if it was used on Company expenditure.

Case 130- Director disqualification for non-payment of PAYE and VAT

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

The Banned Director caused and/or allowed The Insolvent Company (IC) to trade to the detriment of HM Revenue & Customs (HMRC) in respect of Pay As You Earn (PAYE) and National Insurance Contributions (NIC) from 22 October 2017, and in respect of Value Added Tax (VAT) from 07 April 2018, in that:

PAYE

The PAYE liability for the period ending 05 August 2017 became due for payment on 22 October 2017 at which point the PAYE account was in credit for the sum of £6,336.

Between 22 October 2017 and 26 November 2019, the date of liquidation, IC incurred a PAYE and NIC liability of at least £260,383 against which payments of £12,735 were made.

At the date of liquidation, the outstanding liability in respect of PAYE and NIC was £241,312.

VAT

IC submitted quarterly VAT returns for the periods ending 02/18 to 05/19, disclosing a liability of £8,715 against which payments totalling £3,900 were made.

IC failed to submit a return to HMRC for the period ending 08/19 resulting in an assessment being raised totalling £1,491 against which no payments were made.

Following a visit from HMRC on 04 October 2018, an investigation commenced which resulted in an officer’s assessment being raised totalling £433,629.

Comparative treatment

Analysis of the company bank statements for the period 01 January 2018 to 26 September 2019 show payments into the company’s account totalling £1,786,622 and payments totalling £1,783,457 were made from the account in the same period.

Of the payments made by the company, £1,320,149 was paid in respect of wages, while £6,114 was paid to HMRC.

During the same period, PAYE and VAT ledgers show that payments totalling £12,870 were made to HMRC.

At the date of liquidation, HMRC have submitted a claim totalling £683,139.40 while no other creditors have been identified.

Case 131- Director disqualification for trading while knowingly insolvent

Director Disqualified for 3 years by a director signed undertaking.

From 08 August 2019 to the date of liquidation, 24/03/2020, The Disqualified Director allowed the Liquidated Company, whilst insolvent, to continue to take deposits, or payments in full, without reasonable expectation of providing goods in that:

Following two years of balance sheet insolvency, the capital account showed a deficit of £37,566 to accounts period ending 31 March 2018. These were signed by her co-director on 27 March 2019, being approved by the board of the Liquidated Company.

At the end of June 2019, the Liquidated Company carried a VAT liability of £35,943. This related to periods from June 2017 onwards.

At the same point, the outstanding PAYE liability was £4,898.

On 08 August 2019, the County Court Business Centre issued a claim for the sum of £3,366 in favour of a supplier.

Consequently, a county court judgement was made against the Liquidated Company on 13 September 2019. A subsequent writ of control was issued on 15 October 2019.

On 22 November 2019, solicitors acting for another supplier, wrote to the Liquidated Company re: an outstanding amount of £1,702.

From 08 August 2019, the Disqualified Director allowed the Liquidated Company to take either deposits, payments in full or balancing payments. Analysis of documents provided by the liquidator shows that 66 known customers made payments of £42,476. 41 of these customers made a claim to the estate for £30,728.

Case 132- Director disqualification for accounting issues and other offences

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

From 01 March 2019 to 07 December 2021, when The Liquidated Company (LC) went into liquidation (the period), The Banned Director (The Banned Director) failed to ensure that LC maintained adequate books and accounting records or, in the alternative, failed to ensure that LC preserved and delivered up to the Liquidator such records as were maintained. As a consequence, it has not been possible to determine:

That receipts into LC bank account of £312,900 represented the whole of LC sales in the period.

That payments out of LC bank account totalling £297,824 were legitimate company expenditure.

The date on which the company should have registered for VAT and the VAT liabilities due to HMRC.

Whether LC was profitable in the period and any further Corporation Tax liabilities due.

That the Bounce Back Loan (BBL) funds of £50,000 received by LC on 05 June 2020 were used for the economic benefit of LC, which was a requirement of the BBL scheme.

Case 133- Director disqualification for BBL offences and trading to the detriment of HMRC

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

The Banned Director (The Banned Director) caused The Insolvent Company (The Insolvent Company) to apply for a Bounce Back Loan of £40,000 and used at least £24,000 of the funds for the benefit of himself, and not for the economic benefit of the company, which was to the detriment of HMRC. In that:

 During the Covid-19 pandemic, the Government backed loans to limited companies to assist them through a difficult and uncertain period. The Bounce Back Loan (BBL) terms and conditions stipulated that the loan funds were to be used for the benefit of the business and not for personal purposes.

 On 25 May 2020, The Insolvent Company received payment of a £40,000 BBL following an application submitted by him.

 On 29 May 2020, The Insolvent Company owed outstanding liabilities to HM Revenue and Customs (HMRC) of at least £44,502

 On 29 May 2020, he transferred £10,500 of the BBL funds from The Insolvent Company’s bank account to his personal bank account.

 On 01 June 2020, he used £13,500 of the BBL to pay a personal debt.

 No payments were made towards The Insolvent Company’s outstanding HMRC liabilities between the date of receiving the BBL funds and the date of liquidation.

 At date of Liquidation, The Insolvent Company had outstanding liabilities owed to HMRC of £87,699, the Bank for the outstanding BBL of £40,000 and £3,000 for a pension scheme.

Case 135- Director disqualification for misuse of BBL funds and other offences

Director Disqualified for 11 years by Order of the Court.

The Banned Director when he knew or ought to have known a winding up petition had been lodged in Court for The Insolvent Company on 5 February 2021 he removed £26,507 from The Insolvent Company to the detriment of the Bounce back Loan (BBL) Lender in that:

On 1 February 2021 a petition to wind up The Insolvent Company was lodged in the Court of Session and advertised in the Gazette.

The Banned Director has acknowledged that a copy of the petition to wind up The Insolvent Company was sent to him by email on 5 February 2021 although he was not aware of this until the end of February.

Between 1 February 2021 and 4 February 2021 no payments have been made from The Insolvent Company’ bank Account.

On 4 February 2021 The Insolvent Company’ bank balance was £28,159.

Between 5 February 2021 and 16 February 2021, when The Insolvent Company was wound up, payments totalling £26,507 were made to The Banned Director, his accountant and to recipients of which The Banned Director has provided no evidence.

Following the winding up of The Insolvent Company on 16 February the bank balance was £1,591 which was recovered by the BBL Lender.

The BBL Lender was The Insolvent Company’ sole creditor in Liquidation and was owed £48,409.

The criteria for applying for a BBL required that the business was engaged in trading or commercial activity in the UK at the date of the application, was carrying on business on 1 March 2020 and had been adversely affected by coronavirus (COVID-19).

On 6 May 2020 the BBL Lender paid £50,000 into the The Insolvent Company’ bank account.

Between 7 May 2020 and 16 February 2021 £235 was paid into The Insolvent Company’ bank account.

On 4 May 2020 The Banned Director (The Banned Director) applied for a Bounceback Loan (BBL) of £50,000 when I knew or ought to have known that The Insolvent Company Ltd (The Insolvent Company) was not eligible to receive a loan in that:

On 16 January 2020 Accounts for a Dormant Company up to 30 April 2019 were filed for The Insolvent Company at Companies House. These accounts were for Red Tulip Media Ltd which was the former name of The Insolvent Company. The only assets of the company in these accounts were the share capital of £100.

Between 5 June 2019 and 4 May 2020 £949 was paid into The Insolvent Company’ bank account.

On 4 May 2020 The Banned Director applied for a BBL for The Insolvent Company estimating turnover of £250,000. On this date The Insolvent Company’ bank account balance was £203.

The criteria for applying for a BBL required that the business was engaged in trading or commercial activity in the UK at the date of the application, was carrying on business on 1 March 2020 and had been adversely affected by coronavirus (COVID-19).

On 6 May 2020 the BBL Lender paid £50,000 into the The Insolvent Company’ bank account.

Between 7 May 2020 and 16 February 2021 £235 was paid into The Insolvent Company’ bank account.

On 30 October 2020 a representative of The Banned Director confirmed to the Insolvency Service that The Insolvent Company had no trading address, had not traded and was not trading.

Case 136- Director disqualification for accounting issues among other offences

Director Disqualified for 5 years by a director signed undertaking.

The Banned Director failed to ensure that The Liquidated Company Ltd has maintained and/or preserved adequate accounting records or in the alternative failed to deliver up adequate records to the Liquidator for the period from 1 November 2018 to Liquidation. As a consequence it has not been possible to:

Establish the purpose of payments from The Liquidated Company Ltd bank account totalling £159,840.28;

In the absence of signed prepared accounts after 31 October 2018, establish the reason for the change in The Liquidated Company Ltd financial position from Net Assets of £2,537.00 as at 31 October 2018, to a Net Deficiency of £1,725,083.17 at liquidation;

Establish whether The Liquidated Company Ltd had any goodwill, assets or stock that may be realised for the benefit of creditors;

Establish the true amount owed to HMRC in respect of VAT, PAYE, NIC and Corporation Tax;

Confirm the details of all trade suppliers and therefore the true value of trade creditors;

Verify the cause of insolvency is true and accurate.

Case 137- Director disqualification for breaches of GDPR

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

The Banned Director (The Banned Director) caused or allowed The Liquidated Company (LC) to breach Regulation 21(2) of the Privacy and Electronic Communication Regulations 2003 (PECR) between 01 March 2020 to 31 August 2020 by allowing lines allocated to LC to be used for making 76,930 unsolicited live calls to individuals registered with the Telephone Preference Service (TPS) and failed to pay a fee and register with the ICO as a data controller of personal information in a breach of Data Protection (Charges and Information) Regulations 2018 .

LC operated as an online business offering cover and repairs of home appliances from December 2019

On 06 July 2020 the Information Commissioners Office (ICO) began making enquiries into Digital The Liquidated Company UK The Liquidated Company (In Creditor’s Voluntary Liquidation), a connected company to LC due to complaints made from individuals. The complaints were in relation to unsolicited marketing calls to vulnerable individuals

ICO’s investigations found that call line identifiers (LC) which were allocated to LC were being used to make unsolicited phone calls to individual subscribers for marketing purposes. CLI’s allocated to LC made 76,930 call to individuals registered with the TPS between 01 March 2020 to 31 August 2020, in breach of Regulation 21(2) of PECR. The breaches were deemed deliberate by the ICO.

Under the Data Protection (Charges and Information) Regulations 2018, organisations that determine the purpose for which personal data is processed (controllers) must pay a data protection fee unless they are exempt. LC failed to register and pay data protection fees.

As a result of the breaches the ICO raised a monetary penalty of £160,000 on 14 May 2021. An Enforcement Notice was not applicable as LC had entered CVL.

Case 138- Director disqualification for breaches of trading to the detriment of the crown.

Director Disqualified for 3 years by a director signed undertaking.

In the period from 09 March 2019, when The Insolvent Company was incorporated and started to trade, until 01 June 2021, when the company went into liquidation, The Banned Director failed to ensure that The Insolvent Company complied with its statutory obligations to submit accurate tax returns to HM Revenue and Customs (HMRC), and make payment of tax liabilities due, by the relevant dates. Over the same period he also caused The Insolvent Company to trade to the detriment of HMRC, in respect of Value Added Tax (VAT) and Pay As You Earn tax/National Insurance Contributions (PAYE/NIC), resulting in unpaid liabilities of at least £126,607 at liquidation.

VAT

 The Insolvent Company’ VAT returns for quarters ended 30 June 2019 and 30 September 2019, due by 07 August 2019 and 07 November 2019 respectively, were submitted late to HMRC, on 07 August 2020. These returns showed liabilities due for payment totalling £24,787 but no payment was made;

 The Insolvent Company failed to submit VAT returns for any period after 30 September 2019, as a result of which HMRC had to raise assessments of VAT due;

 The Insolvent Company made no payments in respect of its VAT liabilities, at any stage, resulting in unpaid liabilities at liquidation totalling at least £65,846;

PAYE/NIC

 The Insolvent Company made no payments in respect of its PAYE/NIC liabilities, at any stage, resulting in unpaid liabilities at liquidation totalling at least £60,761;

Comparative Treatment

The Insolvent Company’ bank statements show the company made payments totalling £1,049,499 in the period from incorporation to liquidation, but no payments were made against The Insolvent Company’ accumulating tax arrears.

Case 139- Director disqualification for breaches of the COVID Bounce Back Scheme

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

On 06 May 2020, The Company Director (The Company Director) caused The Dissolved Company (DC) to breach the conditions of the Bounce Back Loan (BBL) Scheme by using £8,000 obtained from the BBL scheme for his personal benefit. In that:

The BBL scheme states that the agreement is to provide economic benefit to the business and that the BBL will be used wholly for business purposes and not personal purposes.

On 05 May 2020, DC received a BBL of £8,000 which was applied for by The Company Director.

On 06 May 2020, £8,000 was transferred to a bank account in the name of the co-director.

Between 08 June 2020 and 30 June 2020, The Company Director (The Company Director) caused The Dissolved Company (DC) to fraudulently breach the conditions of the Bounce Back Loan (BBL) Scheme by applying for a second BBL of £50,000 when he knew or ought to have known that only one successful BBL was permissible under the scheme. £50,000 from the BBL was used for his personal benefit. In that:

The BBL states that a business should not apply for a loan if it is already in the process of applying for, or has already received a BBL, with the exception of a top-up loan if the BBL borrowed was less than the maximum amount available (£50,000).

On 04 June 2020, The Company Director applied for a second BBL of £50,000 with a different financial institution on behalf of The Company Director.

On 08 June 2020, £50,000 of the BBL funds were paid into the bank account of DC to which funds totalling £45,000 were transferred to a bank account in the name of DC on the same day.

On 30 June 2020, a further £5,000 of the BBL funds was transferred to a bank account in the name of DC

On 26 October 2021, The Company Director was placed into Creditors Voluntary Liquidation.

At Liquidation, £314,644 was owed to creditors of which £234,047 was owed to HMRC in respect of VAT and Corporation Tax, £58,000 in respect of BBLs, £424 to trade creditors, £612 to The Company Director and £21,561 to financial institutions.

Case 140- Director disqualification for breaches of the BBL Scheme among other offences

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

On 06 May 2020, The Company Director (The Company Director) caused The Dissolved Company (The Dissolved Company) to breach the conditions of the Bounce Back Loan (BBL) Scheme by using £8,000 obtained from the BBL scheme for her personal benefit. In that:

The BBL states that the agreement is to provide economic benefit to the business and that the BBL will be used wholly for business purposes and not personal purposes.

On 05 May 2020, The Dissolved Company received a BBL of £8,000 which was applied for by the co-director.

On 06 May 2020, £8,000 was transferred to a bank account in the name of The Company Director.

At Liquidation, £314,644 was owed to creditors of which £234,047 was owed to HMRC in respect of VAT and Corporation Tax, £58,000 in respect of BBLs, £424 to trade creditors, £612 to the co-director and £21,561 to financial institutions.

Between 08 June 2020 and 30 June 2020, The Company Director (The Company Director) caused The Dissolved Company (The Dissolved Company) to fraudulently breach the conditions of the Bounce Back Loan (BBL) Scheme by applying for a second BBL of £50,000 when he knew or ought to have known that only one successful BBL was permissible under the scheme. £50,000 from the BBL was used for her personal benefit. In that:

The BBL states that a business should not apply for a loan if it is already in the process of applying for, or has already received a BBL, with the exception of a top-up loan if the BBL borrowed was less than the maximum amount available (£50,000).

On 04 June 2020, a second BBL of £50,000 was obtained with a different financial institution on behalf of The Dissolved Company.

On 08 June 2020, £50,000 of the BBL funds were paid into the bank account of The Dissolved Company to which funds totalling £45,000 were transferred to a bank account in the name of The Company Director on the same day.

On 30 June 2020, a further £5,000 of the BBL funds was transferred to a bank account in the name of The Company Director

On 26 October 2021, The Dissolved Company was placed into Creditors Voluntary Liquidation.

At Liquidation, £314,644 was owed to creditors of which £234,047 was owed to HMRC in respect of VAT and Corporation Tax, £58,000 in respect of BBLs, £424 to trade creditors, £612 to the co-director and £21,561 to financial institutions.

Case 141- Director disqualification for trading to the detriment of creditors

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

Between 02 June 2020 and 16 July 2020, The Banned Director (The Banned Director) caused or allowed The Insolvent Company (IC) to enter into transactions totalling £57,065 for her own benefit, for the benefit of her co-director and that of a connected party, at the risk of and ultimate detriment to IC general body of creditors. These transactions took place at a time when The Banned Director knew or should have concluded that IC was insolvent or alternatively, that it would become insolvent as a result of these transactions, in that:

IC was unable to trade after 20 March 2020 due to restrictions imposed by the Government as a result of the pandemic.

On 04 May 2020, IC received a Covid 19 Small Business Grant of £10,000.

On 06 May 2020 IC received a rebate of business rates of £9,954.

KI failed to pay an invoice dated 23 April 2020 for the sum of £14,616 in respect of contractual fees raised by the company that appealed the rates liabilities on IC behalf. Payment was due within 30 days of the date of the invoice and remained unpaid at liquidation.

On 12 May 2020 IC received a Bounce Back Loan of £48,000.

As at 01 June 2020, IC had assets of £69,482 and liabilities of at least £82,780.

Between 02 June 2020 and 16 July 2020, a total of £50,400 was transferred to a bank account held in the names of The Banned Director and her co-director.

Between 05 June 2020 and 17 June 2020, a further £745 was transferred from IC bank account to directly pay costs on behalf of The Banned Director and her co director personally.

On 12 June 2020, £4,920 was paid to The Banned Director’s personal bank account with the reference New Property.

On 15 June 2020, £1,000 was paid to a connected party in repayment of a loan.

On 06 July 2020, IC received a further business rates rebate of £14,257.

On 21 July 2020, IC advisor contacted an Insolvency Practitioner on behalf of IC for insolvency advice.

IC entered into Creditor’s Voluntary Liquidation on 15 October 2020.

At liquidation, IC liabilities to creditors totalled £115,898.

Case 142- Director disqualification for non-payment of HMRC

Director Disqualified for 5 years by Order of the Court.

The Banned Director (The Banned Director) caused The Insolvent Company (IC) to trade to the detriment of HM Revenue and Customs (HMRC) from at the latest 7 April 2017 in respect of Value Added Tax (VAT) and from the tax year ended 2016/2017 in respect of Pay As You Earn (PAYE), National Insurance Contributions (NIC), Construction Industry Scheme (CIS) and Corporation Tax (CT). In that: –

VAT

 At Liquidation, HMRC claimed £147,019.57 in respect of VAT and surcharges for the periods ending February 2017 to May 2019 (although the liability for the period ending May 2019 would not have been due for payment, as V The Banned Director was placed into Liquidation on 17/05/2019).

PAYE/NIC/CIS/CT

 At Liquidation, HMRC claimed £62,026.87 in respect of PAYE/NIC/CIS/CT, penalties and interest for the tax years 2016/2017 to (part tax year) 2019/2020 (although the liability for the part tax year 2019/2020 would not have been due for payment, as V The Banned Director was placed into Liquidation on 17/05/2019).

COMPARATIVE TREATMENT OF CREDITORS

In the period from 07/04/2017 to 16/05/2019, The Banned Director made payments totalling at least £513,985.61 from its main bank account, of which no payments were identified as having been made to HMRC.

Case 143- Director disqualification for fraudulent trading

Director Disqualified for 9 years by Order at trial.

Between 6 October 2014 and 17 December 2014 whilst acting as a formally appointed director and from 18 December 2014 to 11 November 2016, the date of liquidation, The Banned Director (The Banned Director) whilst acting as a director though not formally appointed of The Insolvent Company (LC) caused LC to accept customer payments of at least £202,674 without providing any genuine services in that;

LC promoted itself to potential customers as providing specialist insolvency services and business recovery professionals that could facilitate the aversion of insolvent events

LC accepted customer payments amounting to at least £202,674 from companies facing an imminent or likely insolvent event into its company bank account.

LC 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 LC made no attempt to recover or turnaround the customers’ company businesses for at least 33 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 1 August 2014 and 17 December 2014 whilst acting as a formally appointed director and from 18 December 2014 to 11 November 2016, the date of liquidation, The Banned Director (The Banned Director) whilst acting as a director though not formally appointed of The Insolvent Company (LC) caused LC 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 LC to be passed to the new directors and/or shareholders.

c) Wrongly informing former customer directors’ that their own directors’ compliance obligations would cease following the transfer of the companies to the new shareholders and directors.

d) The Banned Director facilitating a director of T in Liquidation (T) to take dishonest steps that acted to invalidate the appointment of its Creditors’ Voluntary Liquidator dated 22 October 2014.

The Liquidator of T commenced recovery proceedings against the former directors on 7 March 2016 for transactions amounting to £156,875 that were transactions to the detriment of T.

LC claimed in May 2016 that a former sole director of T, had sold the company, along with its shares via a Share Purchase Agreement brokered by LC, and resigned as a director prior to the appointment of the Liquidator during August 2014 to a Mexican national who claimed to be sole director and shareholder of the company.

On 30 August 2016 the Liquidator made an application to Court seeking directions as to the validity and effect of the Share Purchase Agreement and a decision in respect of who were the company’s directors as at 22 September 2014 and who were its shareholders.

On 5 May 2017 the Court ruled that LC’s Share Purchase Agreement dated 18 August 2014 between the former company director of T and a third party of Mexican nationality was a sham and this set it aside as being of no effect.

Despite being made aware at the latest by 24 November 2016 of the winding up order made against The Insolvent Company (LC) and being informed that he should take no action in relation to the assets of (The Banned Director) whilst acting as a director despite not being formally appointed at Companies House instructed LC’s bankers to pay him £26,000 from LC’s bank account on 2 December 2016 without authorisation from the Official Receiver as Liquidator of LC.

The named signatories on LC’s bank account were The Banned Director and his wife and neither were formally appointed directors of LC at the time. L (L), the formally appointed director was not a signatory on the bank account.

The winding up order against LC was made on 11 November 2016. LC 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 Banned Director was issued with notices of the winding up order on 18 November 2016 these being acknowledged by The Banned 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 LC without the authorisation of the Official Receiver.

The Banned Director received £26,000 into his personal bank account from LC’s bank account on 2 December 2016 after providing the Bank with a statement of L titled VALIDATION dated 6 November 2016 claiming to validate the withdrawal of funds from LC’s bank account. No validation order from the Court had been sought or obtained by LC 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 LC’s 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 Banned Director claimed that the funds in LC’s bank account belonged to him. As a result of The Banned Director failing to provide evidence the Official Receiver wrote to The Banned Director on 30 January 2017 requiring him to repay £26,000 and the OR has applied to the Court to enforce this.

The payment to The Banned 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.

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

Case 144 – Director disqualification for breaches of misuse of COVID funds

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

The Banned Director (The Banned Director) made false declarations in obtaining, and thereafter misused, Covid support funding provided to The Liquidated Company’s Restaurant Limited (The Company) through a Government backed Bounce Back Loan (BBL), Local Council Support Grant, and HMRC Job Retention Support Grant, together totalling £117,218.21. In that:

BBL

On 12 May 2020 the Company obtained a Government backed Bounce Back Loan (BBL) totalling £50,000, overstating it’s turnover therein, and did not use the moneys obtained in their entirety for the economic benefit of the business, contrary to the terms of the BBL.

Misapplication/false declarations

 the Company was incorporated on 01 October 2019 and commenced trading on 04 October 2019. Bank statements confirm that between the seven months from 04 October 2019 to 30 April 2020, trading income amounted to £66,353. Based on this income the Company was entitled to a BBL of £16,588;

 on a pro-rata basis the company would have reasonably expected turnover to be £113,736 in a calendar year, equating to an eligibility for a BBL of £28,437

Misuse of BBL funds

 On 12 May 2020 a BBL totalling £50,000 was placed in the Company’s Santander Bank account

 On 12 May 2020 The Banned Director transferred £20,000 to his personal account, described as wages;

 On 13 May 2020 The Banned Director transferred £20,000 to his personal bank account, described as wages

 On 14 May 2020 The Banned Director transferred £6,000 to his personal bank account, described as wages

 On 21 May 2020 The Banned Director transferred £1,000 to his personal bank account, described as wages

 In May 2020 the Company had existed for seven months, was a small restaurant and employed 5 people at maximum, none formally employed subject to PAYE/NIC, with income totalling £66,353

 The purpose of the BBL was to provide economic benefit to a company including the provision of working capital, not for the personal benefit of the directors.

Local Council Support Grant

Between 14 April 2020 and 22 March 2021 the Company received three grants from Uttlesford District Council (the Council) totalling £54,178.73 to which it was not fully entitled, including £26,928 after it had ceased trading. On the day of receipt of each grant The Banned Director removed moneys, in aggregate totalling £50,000 to himself described as wages. In that:

Misapplication

 Local Council Grants were made based on a criteria including the number of employees; level of ongoing fixed costs faced by the business; trading status of the business; and the scale of impact of Covid -19 losses.

 in order to qualify for the maximum grant of £25,000 the Company was required to employ 11 employees and have fixed premises costs of £15,000;

 The Company did not have any employees (i.e. were subject to PAYE/NIC) under that criteria, and only 5 were employed on a casual cash in hand basis

 The Company’s fixed costs, according to the bank statements, were minimal and the underlying business was able to continue to trade

 The Company did not meet the criteria for the initial grant;

Use of funds

 following receipt of the initial grant, on 14 April 2020 The Banned Director transferred the sum of £25,000 to his personal account with the narrative ‘Wages’;

 on 22 March 2021 grants totalling £14,928 were received from the Council even though the Company had ceased trading on or around 28 February 2021;

 on 22 March 2021 he transferred the sum of £15,000 to his personal account with the narrative ‘Wages’;

 on 17 May 2021 a further grant of £12,000 was received from the Council;

 on 17 May 2021 The Banned Director transferred the sum of £10,000 to his personal account with the narrative ‘Wages’;

HMRC Job Retention Support Grant

 The Company received £13,319.48 from HMRC in respect of JRS Grants to assist with the payment of employees’ wages.

 Bank statements show that the Company did not have any employees that were liable for PAYE/NIC and therefore the Company was not eligible for these payments

 On receipt of these moneys The Banned Director transferred moneys to himself described as wages

Case 145 – Director disqualification for breaches of accounting practices

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

The Company Director (The Company Director) failed to ensure The Insolvent Company Ltd (The Insolvent Company) maintained or preserved adequate accounting records for the period from August 2020 to liquidation on 4 June 2021, or in the alternative he failed to deliver up Zuger’s accounting records to the liquidator. In the absence of adequate records for the period, it has not been possible to establish whether

 Coronavirus Job Retention Scheme (CJRS) funds obtained by The Insolvent Company were used exclusively to fund the costs of employment. For all pay periods between August 2020 and January 2021, a total of £17,223 was claimed under the CJRS. £6,398 was paid to employees and £0 was paid to HMRC in respect of PAYE and NIC liabilities.

 A Bounce Back Loan of £12,250, obtained by The Insolvent Company on 13 November 2020 was used for the economic benefit of The Insolvent Company.

Case 146 – Director disqualification for accounting issues

Director Disqualified for 2 years by a signed undertaking of the director / an undertaking agreed by the director / a director signed undertaking.

The Banned Director  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 or allowed 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 Company was registered for VAT from 4 December 2014.

 The 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.

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

Case 147- Director disqualification for breaches of the BBL Scheme

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

On 18 June 2020 The Company Director caused The Dissolved Company Limited to make a fraudulent application for a Bounce Back Loan (BBL) by providing false information to a lender to obtain a BBL totalling £50,000 when he knew or ought to have known that The Dissolved Company was eligible for a BBL loan based on its turnover of no more than £20,071.

The Bounce Back Loan 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.

Accounts for The Dissolved Company for the year ending 31 October 2019 show turnover in the amount of £80,284.

In the BBL application form, completed by him, the turnover for The Dissolved Company was stated to be £250,000.

Creditors at the date of liquidation are £68,427 comprising of the £50,000 Bounce back loan, £14,440 owed to one trade creditor and £3,987 owed to HMRC.

Case 148- Director disqualification for breaches of accounting practices

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

The Banned Director failed to ensure that, from 1 June 2020 to 27 October 2021, the date of liquidation, The Liquidated Company maintained and/or preserved adequate accounting records, or in the alternative he failed to deliver up such accounting records as were maintained or preserved to the liquidator. As a consequence of this failure, in particular amongst others, it has not been possible to determine:

a) the reason for expenditure totalling £110,681.70 in particular:

 Whether 34 payments to The Banned Director between 3 June 2020 and 6 October 2021 for £37,977.19 were for legitimate business expenditure of The Liquidated Company.

 The purpose of 20 payments to 3rd parties between 8 June 2020 and 14 September 2021 totalling £9,897.32;

 If 89 cash withdrawals between 1 June 2020 and 24 December 2020 totalling £5,332.97 were for genuine business transactions of The Liquidated Company.

 If a payment of £5,000 on 22 January 2021 described in the bank statement as a loan was a genuine business transaction relating to The Liquidated Company.

 If 19 credits into the bank account between 1 June 2020 and 27 October 2021 totalling £66,990.91 including the sale of a motor vehicle for £32,476.02 were for genuine business transactions and whether these credits account for all of The Liquidated Company’s income.

b) the full and true amounts due to HMRC with regards to VAT and PAYE/NIC/CT, if any.

c) the accuracy of the statement of affairs lodged in the Liquidation including £13,400 stated as being owed to The Banned Director.

d) Verify the reasons for The Liquidated Company.’s failure.