Bhupinder Singh, the director of MMC Direct Ltd, a clothing and footwear wholesale trader in Manchester, has been disqualified from acting as a company director for seven years from 30 January 2014, for failing to produce adequate accounting records.
The disqualification follows an investigation by the Insolvency Service.
Mr Singh, 40, who traded from Broughton Street, Manchester gave an undertaking to the Secretary of State for Business, Innovation and Skills not to act as a director or in any way manage or control a company until29 January 2021.
In the undertaking, Mr Singh did not dispute that he did not ensure that the company maintained, preserved or delivered up adequate accounting records. As a result it was not possible to reconcile differences between the income and expenditure shown in the companys bank statements and that shown on the VAT returns submitted to HM Revenue and Customs (HMRC) or in its filed accounts.
In addition, the records didnt show what had happened to 407,320 drawn from the bank account in cash or provide verification that other expenditure had been applied to the benefit of the company.
Due to the poor record keeping HMRC wouldnt allow the company to claim that sales of 886,686 within the European Union were legitimately VAT-free and instead raised a bill for 132,718, none of which was paid.
Robert Clarke, Head of Insolvent Investigations North at the Insolvency Service, said:
Companies that trade with limited liability are required by law to keep accurate books and records to account for their transactions.
When a company claims to have exported goods within the European Union, enabling it to reclaim VAT, it must provide clear evidence of the transactions.
Failure to do so means that it is impossible to determine whether supplies have legitimately been made or an attempt is being made to deceive the taxman, and in those circumstances the Insolvency Service will investigate and look to remove the directors concerned from the business arena.