Mark Hugh Collie, director of Linoland Limited, failed to ensure the company complied with its statutory obligation to file VAT returns and make payments to HMRC.

On 17 August the company, with liabilities totalling £221,877, was placed into compulsory liquidation following a winding up petition from the company itself.

An HMRC investigation discovered that between 1 October 2010 and 31 January 2016, when Linoland failed to submit its VAT returns, Collie also concealed sales and purchase transactions from Linoland’s accounting records and annual accounts.

On 14 December 2015, HMRC issued corporation tax assessments for three consecutive tax years between 31 July 2011 and 31 July 2013, for tax due on concealed profits totalling £64,455, resulting in penalties of £39,357.

In May 2016, HMRC issued a VAT Notice of Assessment for the period 1 October 2010 to 31 January 2016 in the sum of £97,047 for lost revenue which Linoland had to pay unless the outstanding VAT returns disclosing the true position were submitted.

Collie failed to submit the outstanding VAT returns or make any payment, instead choosing to put Linoland into liquidation, leaving HMRC with an outstanding liability of £202,859.

Robert Clarke, head of company investigation at the Insolvency Service said: ‘The majority of businesses pay their taxes and rates as required. However some, such as Linoland Limited, don’t play by the rules and want an unfair advantage over their competitors.

‘In this case the director has taken monies from the company that ought to have been paid to HMRC to be spent on public services.’