Director of a company that installed disability ramps across South Wales has been disqualified for providing inaccurate information to HMRC.
Lyndon Porretta, 47, from Newport was a carpenter, who held management positions in a number of joinery installation companies.
In 2000, Lyndon Porretta set up Kruz Developments Ltd (Kruz) after he spotted a gap in the market caused by increasing demand for disability access. The company provided installation services to clients such as rehabilitation centres, banks and retailers across South Wales.
However, work declined during the recession and in late 2015, after inspecting company records, HMRC discovered that Kruz Developments had deliberately filed 14 VAT returns between December 2011 and September 2015 which understated the amount of tax due by a total of ?521,814.
This led to a demand for VAT and penalties of ?743,464, which Kruz was unable to pay in full. The company later entered into voluntary liquidation in 2016.
The Insolvency Service conducted an investigation following the company?s liquidation and confirmed that between at least 7 February 2012 and 6 November 2015 Lyndon Porretta caused Kruz to provide inaccurate VAT information to HMRC.
On 20 August 2018, the Secretary of State accepted a disqualification undertaking from Lyndon Porretta after he did not dispute the findings of the investigation. His ban is effective from 10 September 2018 and lasts for seven years.
Wendy Jones, the Insolvency Service?s deputy head of Insolvent Investigations, said:
Mr Porretta gave false information to HMRC about the VAT owed by the company thus obtaining a significant financial advantage compared to other companies filing correct returns.
Unlike normal trade creditors, HMRC relies on the taxpayer to disclose the correct amount that is owed to them, so a failure to file accurate returns puts them at a disadvantage to other creditors.
Deliberately understating sales in order to reduce the VAT to be paid to HMRC is dishonest. This can also result in understated company profits leading to underpayments of Corporation Tax. Both give a company an unfair advantage over competitors. Taking action against Mr Porretta is a warning to all directors to seriously consider and ensure they perform their duties and obligations.