What is the most common reason for director disqualification?

The most common reason for director disqualification relates to non-payment of Crown debts i.e. failure by the company during its trading life to pay its taxes to HMRC such as VAT, PAYE, NIC and corporation tax. More specifically the way that these director disqualification claims are worded is on the basis that the company traded to the detriment of HMRC and preferred other creditors of the company to the HMRC.

The claims are pursuant to section 6 of the Company Director Disqualification Act 1986.

It is often alleged that other parties (i.e. trade creditors and suppliers) were paid in priority or preference to the HMRC during a set period of the company’s trading (normally in the lead up to liquidation). This is very common in many instances where companies enter into liquidation because the directors often pay trade suppliers rather than the HMRC - who are effectively an involuntary creditor of the company. Trading to the detriment of HMRC is a director disqualification offence which can in turn lead to a finding of unfitness.

However, there are various defences which can be raised in respect of allegations of trading to the detriment of HMRC and at Francis Wilks & Jones we have an expert team of director disqualification legal advisers able to assist in this often complex financial area. Indeed, the team also boasts Stephen Downie, a partner at Francis Wilks & Jones who is an also an accountant and an expert in this field.

Contact an expert director disqualification solicitor now

Francis Wilks & Jones is the county’s leading firm of director disqualification solicitors. We are experts in what we do with a combined 50 years’ experience in director disqualification claims. Contact one of our friendly director disqualification solicitors now for your confidential consultation.  

 

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