Labour provider company director gets 11 years disqualification for VAT scam
Ravinder Singh Mandair, director of Worldwide Tradin Services (UK) Limited (WTS), has been disqualified until 2026 for causing losses to HMRC of £1.45 million, following an Insolvency Service investigation.
Mr Mandair (45) has given an undertaking to the Secretary of State for Business, Innovation and Skills, not to be a director of a company, or be involved in the management of a company in any way for 11 years from 16 March 2015.
WTS traded as a labour provider in the construction industry, sourcing and supplying labour to third parties.
The Insolvency Service’s investigation found that Mr Mandair had caused WTS to engage in a scheme wherein it represented to HMRC that individuals it employed were subcontractors that were:
- registered for VAT
- eligible to be paid without deduction for income tax under the Construction Industry Scheme (CIS).
This had a dual benefit to WTS in that it could reclaim VAT to which it was not entitled and could also pay its employees without making income tax and national insurance deductions.
WTS kept a record of payments made in this way in handwritten ledgers (‘black books’) which were seized by the provisional liquidator from its trading premises. It was the black books which evidenced the way in which the scam had operated. It has been estimated that losses to HMRC for VAT amounted to £469,000 as a consequence.
Furthermore, the investigation discredited all labour supplies ‘received’ by WTS, totalling in excess of £9 million. It was unfeasible for the suppliers to have provided the labour that WTS had claimed. The VAT claimed by WTS on these supplies was £1.45 million, including the £469,000 from the black books transactions. The income tax liability owed to HMRC is believed to be considerable but has not been quantified by HMRC.
WTS also failed to keep or deliver up proper records to the liquidator. This meant that, amongst other things, the purpose of cash withdrawals of £2.9 million made from WTS’s bank account could not be explained.
Ken Beasley, Official Receiver of the Public Interest Unit commented,
This was a sophisticated and lucrative attack on the public purse which caused considerable losses to HM Revenue and Customs. Investigations showed evidence of collusion between WTS, its suppliers and accountants. Mr Mandair’s lengthy disqualification reflects the severity of the misconduct perpetrated.
Notes to editors
Worldwide Tradin Services (UK) Limited (CRO No, 06509626) was incorporated on 20 August 2008. The registered office of WTS for the greater part of six months prior to the liquidation was situated at 26 Albion Street, Oldbury, Birmingham B69 3EY.
On 12 November 2010, a provisional liquidator, Mr Tim Bramston of Griffins Insolvency Practitioners, was appointed following presentation of a winding up petition by HM Revenue & Customs.
Mr Bramston was appointed as liquidator in a creditors’ voluntary liquidation on 25 April 2012. WTS’s realised assets amount to £141,570 with liabilities of £2,841,752 and a resulting deficiency to unsecured creditors of £2,700,282.
Ravinder Singh Mandair, a director of WTS, gave an undertaking not to act as a director on 20 February 2015 for 11 years. The undertaking was accepted and commences on 16 March 2015.
Ravinder Singh Mandair is of Oldbury, West Midlands and his date of birth is 28 April 1979.
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
- act as an insolvency practitioner
- be a receiver of a company’s property
In addition, many other restrictions are placed on disqualified directors by other regulations.
Further information on director disqualifications and restrictions is available.
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.
Published: 11 March 2015
From: The Insolvency Service