A London-based builder has been disqualified from being a director for nine years for failing to ensure that the company accounted for over £1m of cash receipts and paid £288,000 to HMRC, following an Insolvency Service investigation
Rafal Bogdan was the director of RAF-London Ltd, which undertook building and construction work. The company entered liquidation in July 2015, with liabilities to creditors of £448,351.
Of this £436,155 was owed to HMRC, with £288,414 estimated to relate to under-declaration of VAT (£106,924), corporation tax (at least £64,120) and construction industry scheme (CIS) tax (£117,370) from under-declared cash receipts of £1,199,000.
Bogdan was the sole registered director from May 2004 until the company went into liquidation. The estimated deficiency as regards creditors and shareholders was £399,649.
Sue MacLeod, chief investigator of insolvent investigations, Midlands & West at the Insolvency Service, said: ‘Company directors have a duty to ensure businesses meet their legal obligations, including paying taxes. Neglect of tax affairs is not a victimless action as it deprives the taxpayer of funds needed to operate public services.’
HMRC background note:
Most businesses pay their taxes, but when a business goes under, the public purse may be left with large irrecoverable tax debts. HMRC, like any other creditor, has a duty to work with insolvency practitioners to work out whether the directors acted correctly at all times.
From 6 April 2012, HMRC can require employers to pay a security where there is serious risk, based on past behaviour that they will not pay their PAYE or Class 1 NICs.
