Nisha Parmar, who was a director of Angello Design Services Limited and Street Look Clothing Limited, has been disqualified from acting as a director for six years for failing to make payments to HM Revenue and Customs and failing to keep records for both failed companies.
Angello Design Services Limited (Angello) began trading in August 2002, hiring out garment processing machinery. Street Look Clothing Limited (Street Look) began trading in April 2013 as dressmakers. Mrs Parmar was the only director of Street Look from incorporation and became the sole director of Angello on 9 November 2012.
Ms Parmar blamed the economic downturn and a change in the clothing industry for the failure of the companies. The industry saw an increase in customers outsourcing abroad, to companies in Romania and Vietnam who were offering prices Angello and Street Look were unable to compete with. These customers would send goods direct from the factories abroad into high street stores fully packaged and ready to be sold, removing the need for any processing services.
On 12 February 2014, Angello was placed into Liquidation. Street Look followed on 27 June 2014.
The Insolvency service investigation found that:
Angello made no payments to HMRC in respect of its PAYE/NIC liabilities after 3 September 2013
in the absence of complete returns HMRC estimated that on liquidation Angellos liability was 14,046. Mrs Parmar estimated that Angellos PAYE/NIC liability on liquidation was 18,684
Angello failed to file all VAT returns so assessments were raised by HMRC totalling 134,703. Angello paid 10,674
in the absence of complete returns HMRC estimated that on liquidation Angellos liability was 124,029
during the period that Mrs Parmar was a director Angello received 1,089,336 into its bank account and expended 1,089,463
in the same period payments of 32,562 were made to HMRC whilst net payments totalling 10,697 were made to Mrs Parmar. The remaining 1,046,204 was paid to parties other than HMRC
Street Look made no payments to HMRC in respect of its PAYE/NIC liabilities
in the absence of complete returns HMRC have estimated that on liquidation Street Looks liability for PAYE/NIC was 12,032.15. Mrs Parmar estimated that Street Looks PAYE/NIC liability on liquidation was 42,416
during the period that PAYE/NIC was not paid, Street Look received 200,580 into its bank account and expended the same amount
in the same period payments of 6,082 were made in respect of its VAT account and no payments were made in respect of its PAYE/NIC account. Cash withdrawals totalling 8,760 were made during the same period. The remaining 185,738 was paid to parties other than HMRC
Mrs Parmar also failed to maintain records to account for all of the income and expenditure of the businesses and to establish what the true HMRC liabilities were
At the date of liquidation, Angello had assets of 15,417 and liabilities of 220,475. Street Look had assets of 7,459 and liabilities of 310,781.
Commenting on the disqualification, Cheryl Lambert, Chief Investigator at the Insolvency Service, said:
Directors who do not comply with their obligations to HM Revenue and Customs and do not maintain adequate records can expect to be investigated by the Insolvency Service and enforcement action taken to remove them from the market place.
Mrs Parmar failed to ensure that the companies complied with their statutory obligations, resulting in HM Revenue and Customs being owed a substantial amount of money.
Taking action against Mrs Parmar is a warning to directors that there are consequences for failing to take their duties seriously.