Yi Yang Chen, director of Golden Earl Limited, trading as a Chinese takeaway, has been disqualified for causing the company to deliberately understate its*profits.
Yi Yang Chen was served a 10 year disqualification order at Edinburgh Sheriff Court on 23 November 2017 following an investigation by the Insolvency Service, on behalf of the Secretary of State for Business, Energy and Industrial Strategy . The disqualification commenced on 14 December 2017.
The investigation found Mr Chen had caused Golden Earl to deliberately understate its profits between 4 February 2007 and 31 May 2014 from which he gained personal benefit.
The court heard that between 4 February 2007 and 31 May 2014, Mr Chen caused Golden Earl to conceal profits totalling ?653,436 on which Corporation Tax of ?135,528 was owed. In the absence of declaration, HM Revenue & Customs (HMRC) issued an assessment in the sum of ?345,479. This was made up of ?135,528 for concealed Corporation Tax, ?16,994 for interest and a penalty charge of ?192,957.
Between 31 May 2008 and 31 May 2014, from the concealed profits, Mr Chen received loans and advances from Golden Earl which were paid to his private bank accounts, totalling at least ?615,133 giving rise to a tax liability of ?155,788.
In the absence of Golden Earl making payment of ?501,257, HMRC placed the company into liquidation on 9 December 2015.
Robert Clarke, Head of Company Investigation at the Insolvency Service said:
The public can be assured that where there have been abuses of public finance provisions which result in losses of this type, the Insolvency Service will investigate the conduct of the parties involved and take action to remove the privilege of limited liability trading for a lengthy period.