Tax dodging IT director disqualified
Anthony Hodges, an IT consultant, signed a disqualification undertaking preventing him from acting as a company director for 8 years.
Mr Hodges was the sole director of Hodges & Coley Ltd.
The Insolvency Service’s investigation found Mr Hodges failed to ensure Hodges & Coley Ltd paid its tax liabilities from January 2011 until January 2014, when the company went into liquidation. This resulted in a liability to HM Revenue and Customs (HMRC) of £191,136 at the date of liquidation. In that period Mr Hodges paid £3,100 to HMRC and at least £423,024 to himself and his family. The total deficiency to creditors at the date of liquidation was £223,424.
Of the £423,024 paid to Mr Hodges and his family, £41,471 was paid on or after 23 October 2013 at a time when H&C was insolvent and Mr Hodges had informed his accountant of his intention to liquidate the company.
The disqualification, which follows an investigation by the Insolvency Service, means that Mr Hodges cannot control or manage a limited company without leave of the court.
Robert Clarke, Head of Insolvent Investigations North at the Insolvency Service, said:
Company directors have a duty to ensure businesses meet their legal obligations, including paying taxes and must not benefit themselves at the expense of creditors. 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.
Notes to editors
Mr Hodges’ date of birth is 2 April 1960 and he resides in Basingstoke.
Hodges & Coley Ltd (CRO No. 07334254) was incorporated on 03 August 2010 and latterly traded from 51 Majestic Road, Hatch Warren, Basingstoke, RG22 4XD.
Mr Hodges was a director from 03 August 2010 until the company went into liquidation on 27 January 2014.The estimated deficiency at the date of Liquidation was £223,424.
On 3 October 2016, the Secretary of State accepted a Disqualification Undertaking from Anthony Hodges, effective from 24 October 2016, for 8 years.
The matters of unfitness, which Mr Hodges did not dispute in the Disqualification Undertaking, were that:
- he caused Hodges & Coley Ltd (H&C) to provide himself and his family with remuneration and benefits as the sole director of H&C which were excessive in that they represented the majority of H&C’s trading income and deprived it of funds to cover its current liabilities, notably its liabilities to HM Revenue & Customs (HMRC) in respect of Value Added Tax (VAT) between 07 January 2011 when the VAT liability for the quarter ended 30 November 2010 was due for payment and 27 January 2014, the date of liquidation and in respect of Corporation Tax (CT) between 01 June 2012, when the CT liability for year ended 31 August 2011 was due for payment and 27 January 2014, by paying at least £423,024 to himself and his family whilst making payments totalling £3,100 to HMRC. He also failed to comply with his statutory duties to make returns and payments to HMRC in respect of VAT and CT as and when due
- between 23 October 2013 when he was aware that H&C was insolvent and had informed H&C’s accountant of his intention to liquidate H&C and 10 January 2014, Mr Hodges caused H&C to enter into transactions to the detriment of creditors, specifically HMRC, totalling £41,471
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: 13 October 2016
From: The Insolvency Service