Liquidated company treated HMRC “detrimentally”

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A company director has been banned from performing similar duties after failing to provide his company’s liquidator with “adequate” accounting records.

Gary Wright, director of watch and jewellery wholesaler AS Diamonds Limited, was also found to have treated HM Revenue & Customs “detrimentally” in comparison to other creditors, according to the Insolvency Service report.

With the accounting records provided, the liquidator was unable to verify a series of payments to Mr Wright, totalling more than £160,000, as well as cash withdrawals of £40,000.

The validity of a supplier invoice worth £33,000 could also not be determined, said the report.

The investigation further found that no VAT returns were ever submitted and, at assessment, AS Diamonds Limited owed HMRC £123,922.

Overall, £490,000 worth of debt was paid to creditors, but not a penny was paid to HMRC in respect of VAT due.

David Brooks, a Chief Investigator with the Insolvency Service said: “The period of this disqualification contained within the undertaking signed by Gary Wright sends a clear message to other company directors.

“Company directors have a statutory duty under the Companies Act to keep adequate company records which should amongst other things satisfactorily explain payments.

“Further, much of the public service is funded by the correct amount of taxes being paid. By not declaring and paying the correct amount of taxes, Gary Wright has ultimately deprived the public services and the public from receiving the services it deserves. The Insolvency Service therefore will not hesitate to remove them from the business environment in order to protect the public.”

 

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