McGilvray was the sole director of Frogfish Ltd which was placed into compulsory liquidation in June 2016 with liabilities of £94,808, following a winding up petition lodged by HMRC.

A subsequent Insolvency Service investigation found McGilvray had failed to preserve the company’s accounting records between January 2014 and August 2015, and failed to maintain accounting records for the period September 2015 and August 2016, during which time he caused the company to trade on a cash basis.

In the absence of the accounting records it was not possible to verify whether the receipts deposited into the bank account between January 2014 and September 2015 totalling £218,205 were a true reflection of the sale achieved in the period, nor whether the 83 cheque payments totalling £35,236 made over the period were bona fide company transactions.

It was also not possible to identify and verify the level of sales achieved between September 2015 and August 2016 and what became of the monies achieved from the sales made.

In addition, the Insolvency Service could not check on payments made by the company between August 2015 and August 2016, including the level of wages paid and the resulting liability owed to HMRC in respect of PAYE. Nor was it possible to identify and verify the level of VAT owed by the company between February 2014 and August 2016.

The inability to assess the financial position of the company at liquidation was further exacerbated as a consequence of McGilvray’s failure to comply with his statutory obligations.

These included the failure to file annual accounts for the year to 31 December 2014 with Companies House; the failure to prepare and file VAT returns for 10 consecutive VAT quarters between February 2014 and May 2016 resulting in HMRC issuing VAT assessments and surcharges; and the lack of monthly PAYE information to in respect of tax years 2015/2016 and 2016/2017 resulting in HMRC estimating the liability owed.

Robert Clarke, head of company investigation at the Insolvency Service said: ‘Directors who operate cash based businesses have to maintain sufficient records to explain where these monies have gone and following insolvency make sure that such records are delivered up for scrutiny by the relevant bodies.

‘By failing to do this the public cannot be sure that all funds received by the company were used for legitimate purposes.

‘The substantial period of this disqualification reflects the fact that when a company fails to keep adequate financial records it is simply not possible to determine whether there has been other, more serious, impropriety in relation to the management of its affairs.’