The director of a building firm in Wales has been disqualified from acting as a director for seven years for under-declaring sales on VAT returns following an investigation by the Insolvency Service
Judie Thomas was the sole director of a company trading as A&J Thomas Holdings Ltd which went into liquidation in April 2015.
In January 2014 HMRC undertook investigations into the company’s VAT returns and determined that sales figures had been under-declared in at least six VAT periods from December 2011 to December 2013.
The HMRC investigation also determined that Thomas failed to ensure that all VAT returns were submitted on time with the earliest unpaid return being for the period 09/09.
The Insolvency Service said the under-declaration of sales was due to the accountant not being provided with full sales information when the VAT returns were completed. The discrepancies between the VAT returns and the end of year accounts were notified to Thomas by the accountant but she failed to authorise them to notify HMRC.
The company went into liquidation owing £129,322 to creditors, of which £95,322 was the sum due to HMRC for under-declared sales on VAT returns and assorted miscellaneous sums due for corporation tax, PAYE and interest and penalties.
Stephen Baxter, the Official Receiver who oversaw the investigations, said: ‘This disqualification demonstrates that directors who fail in their obligations and cause creditors to lose money can expect to be investigated by the Insolvency Service and enforcement action taken to remove them from the market place.’
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.
