Haulier disqualified for misleading HMRC
Steven Ronald Heard has been disqualified for eight-and-a-half years for not properly dealing with the taxation affairs of LVH Services Limited.
The disqualification, which follows an investigation by the insolvency Service, found that Mr Heard had failed to properly deal with the tax affairs of LVH Services Ltd, particularly in regards to VAT. Mr Heard also did not ensure that adequate and complete accounting records were maintained by the company.
The investigation discovered that at least £509,370 of VAT was neither reported nor paid to HMRC and transactions totalling £1,142,960, the majority of which were to recipients connected to Mr Heard, had insufficient explanations or supporting documentation.
The Secretary of State accepted an undertaking from Mr Heard on 19 April 2016, not to act as a director of a limited company for eight-and-a-half years from 10 May 2016.
The investigation revealed LVH submitted a VAT reclaim for the 12/11 quarter totalling £64,948. HMRC inspected LVH’s records in May 2012 and found that rather than a repayment to LVH from them £215,881 was owed by LVH in relation to VAT. LVH de-registered for VAT on 1 April 2012.
On inspecting the records of an associated company in 2013, HMRC established that from April 2012 LVH had been issuing invoices to that associated company within which VAT totalling £365,491 was charged. This was after LVH had been already been de-registered for VAT. These transactions created a benefit for that associated company and £219,293 should have been paid to HMRC on these transactions. LVH was then re-registered for VAT and, at liquidation, £654,960 was due including interest, surcharges and penalties, in relation to VAT alone.
In parallel the company’s internal records were not maintained properly and over £1m of payments to Mr Heard and entities connected to him are identifiable but not explained. The accounting records maintained were incomplete and it was not possible to establish, amongst other matters:
the reasons for payments made to Mr Heard totalling £201,986
the reasons for payments totalling £639,549 made to a connected third party
the reasons for payments totalling £114,263 made to another third party
the reasons for, and the beneficiaries of, cash withdrawals totalling £63,035
the reasons for payments made to a company of which Mr Heard was a director, totalling £124,127
the extent of any PAYE/NIC liabilities in the last three years of trading
the number and identity of staff employed by the Company and over what period
whether the Company operated any bank account after 22 November 2012
Commenting on the disqualification, Cheryl Lambert, Chief Investigator at the Insolvency Service, said:
This is a significant ban, reflecting the severity with which the Insolvency Service considers the conduct of the director.
Mr Heard oversaw an operation that, over a very long period, did not submit accurate information to the tax authorities and, after de –registering for VAT, participated in a scheme to use one company to reduce the VAT exposure of a connected company. The consequence is that over £1/2m was not properly reported nor paid to HMRC.
Mr Heard’s conduct of LVH’s affairs fell extremely short of the standards of competence and integrity expected and to protect the integrity of the economic system, the Insolvency Service will use its powers to protect the business world, and the general taxpayer, when director’s act in this way.
Notes to editors
LVH Services Limited was incorporated on 26 February 2008. Its registered office was 117 Dartford Road, Dartford, Kent, DA1 3EN. It started trading in September 2009 as a freight and haulage provider from The Old Gatehouse, Sheerness Docks, Sheerness, Kent, ME12 1NB LVH entered liquidation on 12 February 2014. The Statement of Affairs sworn by the director disclosed no assets and liabilities totalling £929,952. The liquidator realised assets totalling £6,000 and established that the liabilities totalled at least £986,628.
LVH Services Ltd was placed into Liquidation on 12 February 2014.
Steven heard lives in Chatham, Kent.
The Secretary of State accepted an undertaking from on 19 April 2016. The disqualification commences on 10 May 2016.
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
In addition that person cannot act as an insolvency practitioner and there are many other restrictions are placed on disqualified directors by other regulations.
Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings. Further information on director disqualifications and restrictions can be found here.
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.
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Published: 18 May 2016
From: The Insolvency Service