Press release

Hotel director banned for not keeping account

Nancy Georgeson (54) of Mallaig, has been disqualified for seven years for failing to maintain adequate company records, register her company for VAT, submit annual accounts and pay Corporation Tax and PAYE.

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Ms Georgeson was the director of NJMAC Enterprises Limited which traded as the Marine Hotel, Station Road, Mallaig.

On 14 November 2016, the Secretary of State accepted a disqualification undertaking from Nancy Georgeson effective from 5 December 2016 for 7 years.

The disqualification prevents her from directly or indirectly becoming involved in the promotion, formation or management of a company for the duration of the term.

Matters of unfitness, which Ms Georgeson did not dispute in the Disqualification Undertaking included that:

  • for the period 1 October 2012 to 1 January 2014, she failed to ensure that NJMAC Enterprises Limited maintained and/or preserved adequate accounting records, or in the alternative, she failed to deliver up such records as were maintained/ preserved to the Liquidator. As a consequence of the absence of adequate accounting records it is not possible to account for the company’s assets, income or expenditure, determine the level of director’s remuneration or assess the extent to which the company had liabilities to HMRC
  • Ms Georgeson failed to comply with the statutory obligation to register NJMAC for VAT with HMRC, submit annual accounts to Companies House, submit Corporation Tax returns/payments to HMRC or submit PAYE/NIC returns/payments to HMRC.

Commenting on the disqualification, Robert Clarke, Investigations Group Leader at The Insolvency Service said:

Directors have a duty to ensure that their companies maintain proper accounting records, and, following insolvency, deliver them to the office-holder in the interests of fairness and transparency.

Without a full account of transactions it is impossible to determine whether a director has discharged duties properly, or is using a lack of documentation as a cloak for impropriety. Ms Georgeson has paid the price for failing to do that, as she cannot now carry on in business other than at her own risk.

Notes to editors

Nancy Georgeson’s date of birth is 21 June 1962 and she resides in Mallaig.

NJMAC Enterprises Limited (SC375741) was incorporated on 30 March 2010. Its registered office was the Marine Hotel, Station Road, Mallaig, PH41 4PY. It traded from the same address. NJMAC Enterprises Limited was placed into Liquidation on 18 February 2015.

Ms Georgeson was an appointed director from incorporation. On 18 February 2015, the company was wound up on a petition presented by HMRC.

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

Failure To Maintain, Preserve and/ or Deliver Up Accounting Records

In respect of the period 1 October 2012 to 1 January 2014, Nancy Georgeson failed to ensure that NJMAC Enterprises Limited maintained and/or preserved adequate accounting records, or in the alternative she failed to deliver up such records as were maintained/ preserved to the Liquidator. As a consequence of the absence of adequate accounting records it is not possible to account for the company’s assets, income or expenditure, determine the level of director’s remuneration or assess the extent to which the company had liabilities to HMRC. The accounts to 30 September 2012, show that the company had assets of £176,818, consisting of £127,141 in a Shareholders Loan, £45,577 in a loan to an associated company and £4,100 in stock. In the absence of accounting records it has not been possible to ascertain whether these assets have been realised to the benefit of the company through disposition prior to the liquidation, or represent potential realisations in the proceedings for the benefit of creditors.

In the absence of accounting records, in particular, sales and purchase invoices/ ledgers or a cashbook it is not possible to verify what sales were generated by the company or to account for it’s expenditure. Further it is not possible to determine the extent to which the company was liable for Value Added Tax (VAT).

In the absence of bank or payroll records, it is not possible to determine the amount of remuneration received by the director of the company or the full extent of Pay as You Earn (PAYE) and National Insurance Contributions (NIC) due to HM Revenue & Customs (HMRC).

Failure To Comply With Statutory Obligations

Ms Georgeson failed to comply with the statutory obligation to register NJMAC for VAT with HMRC, submit annual accounts to Companies House, submit Corporation Tax returns/payments to HMRC or submit PAYE/NIC returns/payments to HMRC.

Professionally prepared financial statements show that the company turnover for the period to 30 September 2011 was £306,494 and for the year ended 30 September 2012 was £293,689, these sums being above the VAT threshold beyond which registration is a statutory requirement. The financial statements to 30 September 2012 show that the company owed £80,484 in respect of VAT. HMRC has advised that NJMAC was not registered for VAT and no payments were made in respect of VAT.

From 19 May 2011 to 01 January 2014, the date the company ceased trading, in respect of PAYE and NIC, and from 1 July 2012 in respect of Corporation Tax, Ms Georgeson failed to ensure that NJMAC submitted Corporation tax returns or made payments and returns to HMRC in respect of PAYE, NIC and Corporation Tax.

The company was incorporated on 26 March 2010 and had a statutory obligation prepare and submit annual accounts to the Register at Companies House. Ms Georgeson caused NJMAC to fail to comply with its statutory obligation to submit accounts as and when due, with no accounts filed throughout the trading period.

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 8 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.

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.

The agency also authorises and regulates the insolvency profession, 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 1 December 2016