VAT evading jewellery company: directors share 15 years’ ban
Middlesex jewellery company directors are given 7-and-a-half year disqualifications for allowing company’s VAT evasion
Mr Tejpreetpal Singh Gill, aged 35 a company director from Hounslow, Middlesex, and Dr Harvinder Singh Rao, aged 41, and from Southall, Middlesex, directors of Blue Saffron Trading Ltd, have each been disqualified for 7-and-a-half years from April 2016 after giving an undertaking to the Secretary of State for Business Innovation & Skills, for involving their company in a scheme linked to VAT fraud.
The disqualifications follow an investigation by the Insolvency Service’s Public Interest unit. The company traded as a wholesaler of jewellery and fabric between January 2006 and March 2007.
The investigation uncovered that between January 2006 and March 2007 the directors caused or allowed Blue Saffron Trading Ltd to participate in transactions which were connected to the fraudulent evasion of VAT. They were also found to have made wrongful claims for VAT totalling £321,107.
The directors failed to conduct adequate due diligence into the supplier companies despite being made aware of the high risk of VAT fraud in their trade sector. All of the deals conducted by the company were traced back to tax losses totalling at least £251,000.
Paul Titherington, the Official Receiver in the Public Interest Unit, said:
Blue Saffron Trading Ltd was involved in trading in a fraudulent VAT scheme which had been costing the UK Exchequer significant amounts of money at the time the fraud was perpetrated.
This is not a victimless crime, as it impacts on honest tax payers and their families who as a result, suffered the effects of funding shortages in healthcare, education and other front line services.
Regulatory changes, investigative action and legal proceedings have reduced the scale of this fraud from 2007 onwards.
Notes to editors
Mr Tejpreetpal Singh Gill of Hounslow, Middlesex and his date of birth is 26 August 1978; Dr Harvinder Singh Rao of Southall, Middlesex and his date of birth is 4 September 1974. The Blue Saffron Trading Ltd (Company Reg no.5604682) was incorporated on 27 October 2005 and was ordered into compulsory liquidation on 4 May 2011.
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