Press release

Disqualification extended for Stoke joiner who breached directorship ban

Michael Ashton is disqualified from running any company for ten years for continuing to act as a director while disqualified.

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Mr Ashton gave a disqualification undertaking to the Secretary of State for Business, Energy and Industrial Strategy, not to run or control a company without leave of the Court until 14 May 2027.

An investigation found that Mr Ashton had been the dircector of MA Partitioning, Ceilings & Joinery Ltd in breach of a previous five year disqualification undertaking that had been due to expire on 6 October 2018. MA Partitioning failed to submit statutory returns to HM Revenue and Customs and traded to their detriment. HMRC were owed £516,057 at liquidation or in the alternative he failed to ensure that the company deregistered for VAT, PAYE and CIS.

In 2013 as a director of CNT Ancillaries Ltd, Mr Ashton had failed to ensure the company maintained adequate accounting records and failed to ensure the company complied with its statutory obligations to HM Revenue and Customs, causing the company to trade to their detriment. This misconduct had resulted in the earlier director disqualification undertaking.

Aldona O’ Hara, Investigation Leader, Insolvent Investigations Midlands & West at the Insolvency Service, said:

This result should make it very clear to disqualified directors who ignore their disqualification undertakings and continue to act as directors that they will be vigorously pursued by the Insolvency Service.

The length of the undertaking in this case sends a clear message to the business community that such actions will not be tolerated. In addition, directors who fail to ensure HMRC are treated on an equal basis with other classes of creditor gain an unfair advantage over those companies who pay their taxes correctly and on time.

They can expect to be investigated by the Insolvency Service and enforcement action taken to remove them from the market place.

Notes to editors

MA Partitioning, Ceilings & Joinery Ltd trading as CNT Joinery (company registration number: 07816838) was incorporated on 20 October 2011 with its registered office at 74 Stallington Road, Blythe Bridge, Stoke-on-Trent, Staffordshire, ST11 9PD Michael Ashton was the sole appointed director from 20 November 2011 to 6 May 2015.

Michael Ashton’s date of birth is 1 July 1957 and he resides at Stoke on Trent.

The company traded as a joinery installation, provider of shop fitting services and interior fittings Installation. It went into Creditors’ Voluntary Liquidation on 06 May 2015.

The ten year disqualification undertaking was signed on behalf of the Secretary of State for Business, Energy and Industrial Strategy on 24 April 2017 to be effective from 15 May 2017.

The matters of unfitness, which Michael Ashton did not dispute in the Disqualification Undertaking, were that:

  • between 7 October 2013 and 6 May 2015 (the date of liquidation), Michael Ashton acted as a director of MA Partitioning, Ceilings & Joinery Ltd (MAPCJL) trading as CNT Joinery (company registration number:07816838) in contravention of a Disqualification Undertaking which commenced on 07 October 2013 for a period of five years
  • following the Creditors’ Voluntary liquidation of CNT Ancillaries Limited (CNT) on 30 August 2013, Michael Ashton undertook to the Secretary of State that he would not, for a period of 5 years from 07 October 2013, act as a director of a company or be in any way concerned in the promotion, formation or management of a company
  • the misconduct that was not disputed by Michael Ashton was that he caused CNT to trade to the detriment of Her Majesty’s Revenue and Customs (HMRC) and that he failed to ensure that CNT maintained adequate accounting records
  • following his disqualification undertaking Michael Ashton did not resign as a director of MAPCJL and continued to act in the capacity of a director from 7 October 2013 to 6 May 2015 the date MAPCJL was placed into liquidation, without leave of the Court
  • Michael Ashton submitted the Statement of Affairs of MAPCJL as at 06 May 2015 verified by Statement of Truth showing assets of £163,100 and liabilities to creditors of £404,284
  • Michael Ashton failed to ensure that MAPCJL trading as CNT Joinery complied with its statutory obligations to submit returns to HMRC in respect of Value Added Tax/Pay As You Earn/National Insurance Contribution/Construction Industry Scheme Tax and Corporation Tax and caused MAPCJL to trade to the detriment of HMRC from 8 March 2012 (when the VAT liabilities for the first VAT period fell overdue for payment in full to HMRC) until MAPCJL entered into liquidation on 06 May 2015

Or in the alternative:

  • Michael Ashton failed to ensure that MAPCJL complied with its statutory obligations to submit returns to HMRC in respect of its VAT/PAYE/NIC, CIS Tax and Corporation Tax and caused MAPCJL to trade to the detriment of HMRC from 08 March 2012 (when the VAT liabilities for the first VAT period fell overdue for payment in full to HMRC) until at least 13 June 2013. Thereafter Michael Ashton failed to ensure that MAPCJL deregistered for VAT, PAYE and CIS and consequently CNTJX Limited- In liquidation (company registration number: 08568293) did not incur any VAT/PAYE/CIS and CT liabilities.

VAT:

  • MAPCJL registered for VAT effective from 20 November 2011
  • MAPCJL submitted the first VAT Return from registration to the period ended 01/12 claiming a refund of £473 which was paid by HMRC to MAPCJL
  • MAPCJL failed to submit VAT Returns to HMRC for nine consecutive VAT quarters ended: 04/12, (£2,160), 07/12, 10/12, 01/13, 04/13, 07/13, 10/13, 01/14, 04/14 and HMRC issued VAT Assessments totalling £22,047 and surcharge assessments totalling £1,793. On 09 August 2012 the VAT quarter ended 04/12 was paid in full. On 04 January 2015 and 08 January 2015 HMRC received two payments of £10,000 each. HMRC applied these to the VAT Assessments totalling £19,887 for the VAT quarters ended: 07/12, 10/12, 01/13, 04/13, 07/13, 10/13, 01/14, 04/14 and applied the balance of £113 towards the surcharge liability for the VAT quarter ended 07/14
  • MAPCJL submitted the VAT Return for the VAT quarter ended 07/14 nearly a month late to HMRC disclosing VAT liabilities of £35,922. This liability remained outstanding at the date of liquidation. HMRC applied a surcharge of £5,388 of which amount £5,275 remained outstanding at the date of liquidation
  • MAPCJL submitted a VAT Return to HMRC for the VAT quarter ended 10/14 disclosing VAT liabilities of £20,779 and HMRC applied a surcharge of £3,117. These amounts remained outstanding at the date of liquidation
  • no VAT Return was submitted by MAPCJL to HMRC for the VAT quarter ended 01/15 and HMRC issued a VAT Assessment of £26,288 and a surcharge assessment of £3,943.These amounts remained outstanding at the date of liquidation
  • following visits to MAPCJL on 03 March 2014 and 04 September 2014 HMRC identified under declarations of VAT. HMRC raised Officers Assessments on 30 September 2014 and 04 October 2014 for additional under declared VAT liabilities of £10,028 for the period ended 01/12 and for nine consecutive VAT quarters ended: 04/12, 07/12, 10/12, 01/13, 04/13, 07/13, 10/13, 01/14, and 04/14 totalling £284,771. In addition HMRC applied Civil penalties of £17,557 and Officers Assessment interest of £17,672. The oldest liability was for the VAT period ended 01/12 which fell overdue for payment in full to HMRC on 08 March 2012
  • at the date of liquidation the total amount owed to HMRC was £477,577,made up of VAT Returns, £56,700, VAT Assessments of £26,288 ,surcharges of £36,959, surcharge assessments of £3,943, VAT under declarations of £294,799, Civil penalties of £17,557 and interest of £17,672

CIS

  • for the 2011/2012 tax year according to HMRC’s posting summary MAPCJL submitted CIS Return to HMRC disclosing CIS Tax liability of £3,376. MAPCJL failed to submit a P35-Return and HMRC applied penalties totalling £1,100. All of these amounts remained outstanding as the date of liquidation
  • for the 2012/2013 tax year MAPCJL failed to submit CIS monthly returns for the entire tax year and the P35-Return. HMRC applied penalties totalling £11,400 which remained outstanding at the date of liquidation
  • for the 2013/2014 tax year MAPCJL failed to submit CIS monthly returns for the entire tax year and the P35-Return. HMRC applied penalties totalling £10,900 which remained outstanding at the date of liquidation
  • for the 2014/2015 tax year MAPCJL submitted three CIS monthly returns for the tax months ended: 05/08/2014, 05/10/2014 and 05/11/2014 disclosing CIS tax liabilities of £5,900 and failed to submit nine monthly CIS returns. HMRC estimated CIS tax liabilities totalling £494. No payments were made by MAPCJL to HMRC. No RTI monthly returns were submitted to HMRC by MAPCJL and HMRC estimated the PAYE/NIC liability of £3. HMRC applied CIS penalties totalling £3,600. All of these amounts remained outstanding as at the date of liquidation
  • at the date of liquidation the total amount owed to HMRC was £37,080, made up of CIS tax liabilities of £9,276, estimated CIS and PAYE/NIC tax liabilities of £497, CIS and PAYE penalties totalling £27,000 and interest of £308
  • MAPJCL failed to submit the CT return was submitted from commencement of trading from 20 November 2011 to the period ended 19 October 2012 and HMRC applied penalties and interest totalling £200 which remained outstanding at the date of liquidation
  • MAPJCL failed to submit CT returns for the years ended 31 October 2012 and 31 October 2013 and HMRC applied penalties and interest totalling £1,200 which remained outstanding at the date of liquidation

Differential Treatment

  • MAPCJL’s bank account statements show that between 08 March 2012 (when the full amount of the VAT liabilities for the first VAT period ended 01/12 fell overdue for payment) to the date of liquidation on 06 May 2015, £3,329,549 was expended from the bank accounts. Of this amount £22,160 paid to HMRC in respect of its VAT liabilities and nothing was paid to HMRC in respect of its CIS Tax/PAYE/NIC liabilities. Whilst over the same period £12,800 was paid to him or to his benefit and £3,294,588 was paid to various other

A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:

  • act as a director of a company
  • take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership
  • be a receiver of a company’s property

Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings. Persons subject to a disqualification order are bound by a range of other restrictions.

The Insolvency Service, an executive agency sponsored by the Department for Business, Energy and Industrial Strategy (BEIS), administers the insolvency regime, and aims to deliver and promote a range of investigation and enforcement activities both civil and criminal in nature, to support fair and open markets. We do this by effectively enforcing the statutory company and insolvency regimes, maintaining public confidence in those regimes and reducing the harm caused to victims of fraudulent activity and to the business community, including dealing with the disqualification of directors in corporate failures. Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available.

BEIS’ mission is to build a dynamic and competitive UK economy that works for all, in particular by creating the conditions for business success and promoting an open global economy. The Criminal Investigations and Prosecutions team contributes to this aim by taking action to deter fraud and to regulate the market. They investigate and prosecute a range of offences, primarily relating to personal or company insolvencies.

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Published 5 July 2017