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Director disqualified for failure to pay taxes

Director disqualified for failure to pay taxes

Robert Thompson, the sole director of Thompson Construction & Training Limited which traded out of Blaydon on Tyne and provided training and consultancy services, has been disqualified for three years and six months following an investigation by the Insolvency Service.

Mr Thompson, 56, of Blaydon on Tyne, Tyne & Wear gave an undertaking to The Secretary of State for Business, Innovation and Skills not to promote, manage or be a director of a limited company from May 2014 until 2017.

The investigation found that for more than a year Mr Thompson had failed to ensure that the company made payments to HM Revenue and Customs towards its VAT liability.

Robert Clarke, Group Leader of Insolvent Investigations North at the Insolvency Service, said:-

“The Insolvency Service will rigorously pursue traders who seek an unfair advantage over their competitors by not paying VAT or PAYE to the Government.

“If you run a limited company, you have statutory protections as well as obligations. If you fail to comply with your obligations, The Insolvency Service will investigate you and you could lose the protection of limited liability.”

The investigation also found that in the six months prior to liquidation, all of the companies trading income was paid to Mr Thompson. Instead of accounting to HM Revenue and Customs for the associated income tax by way of self assessment tax returns, as he had done in previous years, Mr Thompson chose to submit a P35 tax return on behalf of the company approximately one month prior to liquidation, thereby creating a PAYE liability which the company had no way of paying.

The company was placed into Liquidation on 12 June 2012 with an estimated deficiency to creditors of £160,965.

In giving the undertaking, Mr Thompson did not dispute that he failed to ensure that the company complied with its statutory obligations to file VAT returns to H M Revenue & Customs, to make payments in respect of VAT and that by his actions he had caused a PAYE/NIC liability to be created, leaving at least £160,315 owing to HMRC at the date of liquidation.

About The Author

Mark Hodgson is the Managing Director of Tremark Associates, one of the UK’s leading providers of investigative services. Mark has 30 years experience in private Investigations and the commercial debt recovery industries. He is Vice President of the Association of British Investigators, a member of the World Association of Detectives, The Institute of Credit Management and an associate member of R3 -The Association of Business Recovery Profession.