7-year bankruptcy restriction for long-term failure to file tax returns or pay creditors
Blessious Mutebi Kalemeera, a bankrupt and residential home owner, has been given a 7 year bankruptcy restriction by Leicester County Court for failing to complete his tax returns for 9 years and for spending £6,500 on his wedding after a bankruptcy petition was presented against him.
Mr Kalemeera’s restriction follows an investigation by the Insolvency Service.
Mr Kalemeera (47) was ordered by the court, to be bound by the restrictions set out in insolvency law which a bankrupt is subject to until they are discharged from bankruptcy – normally 12 months – until October 2021. The court made the order in February 2015, backdating the restriction to October 2014.
In addition, Mr Kalemeera cannot manage or control a company during this period without leave of the court.
The investigation found that Mr Kalemeera, who traded at Pool Cottage Residential Home, Melbourne in Derbyshire, had neglected his business affairs between April 2004 and July 2013. In doing so, he increased his liability to HMRC by £176,403.
The investigation also found payments into Mr Kalemeera’s business bank account in the period of April 2012 and March 2013 totalled £396,898.70, but only £135 was paid to HM Revenue & Customs despite his liability to them.
In addition, between June 2013 and July 2013, despite facing bankruptcy, Mr Kalemeera made payments from his bank account of £6,500 which he attributed to his own wedding expenses.
On 8 July 2013, a Bankruptcy Order was made against Mr Kalemeera on a petition presented by HMRC. His total deficiency was around £876,863.
Commenting on the case Alan Draycott, Official Receiver for Nottingham said,
Mr Kalemeera’s neglect of his business affairs over 9 years meant that the crown ended up losing over £175,000. His failure to pay tax gave him an unfair advantage over traders paying tax and fell well below that expected of someone engaged in business.
His spending of £6,500 on his own wedding knowing he faced bankruptcy, showed his disregard for the tax system. This 7 year restriction should help protect local businesses to compete on a level playing field.
Notes to editors
The bankruptcy order was made on 9 July 2013 following a petition by HMRC presented on 27 February 2013.
Blessious Mutebi Kalemeera is of Loughborough, Leicestershire and his date of birth is 23 December 1967.
Mr Kalemeera traded at Pool Cottage Residential Home, Pool Road, Melbourne, Derbyshire DE73 8AA.
If the Official Receiver considers that the conduct of a bankrupt has been dishonest or blameworthy in some other way, he (or she) will report the facts to court and ask for a Bankruptcy Restrictions Order (BRO) to be made. The court will consider this report and any other evidence put before it, and will decide whether it should make a BRO. If it does, the bankrupt will be subject to certain restrictions for the period stated in the order. This can be from 2 to 15 years.
The bankrupt may instead agree to a Bankruptcy Restrictions Undertaking (BRU) which has the same effect as an order, but will mean that the matter does not go to court.
There are restrictions set out in insolvency law that the bankrupt is subject to until they are discharged from bankruptcy – normally 12 months - and include that bankrupts:
- must disclose their status to a credit provider if they wish to get credit of more than £500
- who carry on business in a different name from the name in which they were made bankrupt, they must disclose to those they wish to do business with the name (or trading style) under which they were made bankrupt
- may not act as the director of a company nor take part in its promotion, formation or management unless they have a court’s permission to do so
- may not act as an insolvency practitioner, or as the receiver or manager of the property of a company on behalf of debenture holders;
- y not be a Member of Parliament in England or Wales
The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK. In addition, the agency authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.
Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available.
All public enquiries concerning the affairs of the bankrupt should be made to: The Official Receiver, Level One Apex Court City Link Nottingham NG2 4LA Tel: 0115 852 5000, email: Nottingham.OR@insolvency.gsi.gov.uk.
Published: 6 March 2015
From: The Insolvency Service