Stephen Martin of Bury St Edmunds was the director of S P Martin Builders Ltd from May 2005 until it went into liquidation in March 2015 with a deficiency as regards creditors of £82,801.

An Insolvency Service investigation found he had failed to maintain or deliver up the company’s accounting records, meaning it has not been possible to establish that all money paid out by his firm was related to genuine company expenses. It has also not been possible to verify the company’s true level of sales income or ascertain the reason for bank payments totalling £72,420.

The investigation also found that Martin caused the company to fail to file the required annual accounts and returns with Companies House from 2010 to 2015. In addition, he did not submit the necessary returns and payments in respect of taxes over a five year period from 2010 to 2015, resulting in £81,226 outstanding to HMRC in the liquidation.

Robert Clarke, investigations group leader at the Insolvency Service said: ‘Directors cannot cloak their actions through a lack of records, or seek to gain an unfair competitive advantage through non-payment of taxes, and the Insolvency Service will take robust action against those who fail to maintain the standards required.’

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.