Restaurant company director banned for concealing VAT liabilities
A Glasgow director has been disqualified for 7 years for concealing the company’s liabilities from HMRC through not submitting VAT returns.
Mr Kasif Baig (37), a restaurant company director from Glasgow, has been disqualified from acting as a director for concealing VAT liabilities. At Glasgow Sheriff Court on 20 July 2016, Sheriff Swanson ordered that Mr Baig should not act as a director or be involved in the management of a company for seven years, from 9 August 2016.
Mr Baig was the sole director of 119 West Street Limited, a restaurant and take away trading as The Village restaurant from 119 West Street, Tradeston, Glasgow, from 6 January 2011 until it went into liquidation on 27 November 2014.
For the quarters 07/12 and 10/12 the companies VAT returns were not submitted on time and HMRC raised assessments for these quarters amounting to £2,189.00 which were paid by the company. Subsequent returns submitted to HMRC by the company for these quarters on 6 September 2013, showed that the company had a VAT liability for these quarters of £6,939.50, a difference of £4,750.50, which was paid by the company on 20 September 2013. No returns were submitted for the quarter 01/13 to 01/14, causing HMRC to raise assessments for this period amounting to £10,127.35 of which £1,095.35 were surcharges. These assessments of VAT were paid by the company and Mr Baig knew or ought to have known that these assessments understated the amount actually owed to HMRC.
For the quarters 04/14 and 07/14, the company submitted Nil returns for VAT. Only after an inspection visit from an officer of HMRC, which involved an examination of company records, did the under declaration of VAT for the quarters 01/13 to 01/14 become apparent, which resulted in significant additional assessments of £105,026 in the form of Civil Penalties, being issued to the company.
Robert Clarke, Head of Company Investigation at the Insolvency Service said:
Company directors have a duty to ensure businesses meet their legal obligations, including paying taxes. Deliberate neglect of tax affairs is not a victimless action as it deprives the taxpayer of the funds needed to operate public services.
The Insolvency Service will take action against directors who do not take their obligations seriously and abuse their position of trust.
Notes to editors
Kasif Baig’s date of birth is 19 September 1978.
119 West Street Limited (SC391078) went into voluntary liquidation on 27 November 2014 with a deficiency to creditors of £153,000 which subsequently decreased to £110,116. The company operated as a restaurant and take away, it operated as The Village, 119 West Street, Tradeston, Glasgow, G5 8BA.
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: 8 September 2016
From: The Insolvency Service