Didar Sanghera, who ran Crowntree Investments, failed to comply with his legal responsibilities as a company director, and was sentenced to a 12-month community order at Gloucester Crown Court.

Sanghera failed to maintain company accounts in 2017, and upon investigation, owed £84,472 to HMRC and £4,500 to another company.

Crowntree Investments, which specialised in roofing services for the construction industry, was incorporated in 2009, and Sanghera’s brother became sole director in 2011. Sanghera took over the business from his brother in 2015.

Sanghera was brought before the court for failing to maintain company accounts. Crowntree Investments faced winding up orders in April 2017 and was dissolved in October 2018.

Prosecutor Derek Perry said: ‘The debt the company owed is disputed. The total deficiency was identified as £334,837 – however, the proof of actual debt owed is £84,472 to HMRC and £4,500 to another bone fide company.

‘Mr Sanghera’s brother also made a claim for in excess of £220,000. This sum arose during civil court proceedings but he wasn’t able to substantiate his claim with any documentation.

‘In reality, therefore, it was only the Inland Revenue and one company that have lost out.

‘This was not due to dishonest or fraudulent activity but to the way the company was run.’

Sanghera informed the judge that the information given to the court was news to him, having previously had issues with his brother. According to Sanghera, he was kept in the dark about his brother's financial situation.

Perry added: ‘The company’s records show that in the last set of accounts submitted in 2015 by Sanghera’s brother it had assets of £220,000, of which £170,000 were fixed assets.

‘It is unclear what happened to those assets since 2015 and this should have been made clear in the company accounts, which were never completed or submitted by the defendant.

‘The essence of this case is that Sanghera had taken over the company as the sole director but naively failed to maintain the accounts as he was required to do so by law.

‘There has also been a delay in this case coming to court due to civil proceedings and the Covid-19 lockdown.’

Sanghera pleaded guilty to the charge that, as a director of Crowntree Investments, he failed to comply with requirements for keeping accounting records between 30 June 2015, and 11 April 2017, in compliance with the Companies Act 2006.

Businesses, by law, are required to keep their accountancy records for three years from the date on which they were made.

He also admitted to failing to submit adequate accounting records for the same period.

Judge Ian Lawrie QC said that, although this was a serious case, it did not warrant a prison sentence.

‘When you became a director of the company you automatically assume significant responsibilities.

‘These responsibilities are in place to ensure that you protect the company’s assets and that creditors are paid. This includes the Inland Revenue.

‘However, I form the view that you chose not to respond to the demands of HMRC. You were not being deliberately dishonest but were rather naïve about your responsibilities.

‘You couldn’t see the position you were in and chose to ignore it.’

The judge added that Sanghera was a man of ‘good character’, showing remorse and regret in his actions.

Sanghera was sentenced to a 12-month community order, including 100 hours of unpaid work. He was also given a £1,937 fine for prosecution costs and a victim surcharge of £60.