Steven Ronald Heard has been disqualified for eight-and-a-half years for not properly dealing with the taxation affairs of LVH Services Limited.
The disqualification, which follows an investigation by the insolvency Service, found that Mr Heard had failed to properly deal with the tax affairs of LVH Services Ltd, particularly in regards to VAT. Mr Heard also did not ensure that adequate and complete accounting records were maintained by the company.
The investigation discovered that at least 509,370 of VAT was neither reported nor paid to HMRC and transactions totalling 1,142,960, the majority of which were to recipients connected to Mr Heard, had insufficient explanations or supporting documentation.
The Secretary of State accepted an undertaking from Mr Heard on 19 April 2016, not to act as a director of a limited company for eight-and-a-half years from 10 May 2016.
The investigation revealed LVH submitted a VAT reclaim for the 12/11 quarter totalling 64,948. HMRC inspected LVHs records in May 2012 and found that rather than a repayment to LVH from them 215,881 was owed by LVH in relation to VAT. LVH de-registered for VAT on 1 April 2012.
On inspecting the records of an associated company in 2013, HMRC established that from April 2012 LVH had been issuing invoices to that associated company within which VAT totalling 365,491 was charged. This was after LVH had been already been de-registered for VAT. These transactions created a benefit for that associated company and 219,293 should have been paid to HMRC on these transactions. LVH was then re-registered for VAT and, at liquidation, 654,960 was due including interest, surcharges and penalties, in relation to VAT alone.
In parallel the companys internal records were not maintained properly and over 1m of payments to Mr Heard and entities connected to him are identifiable but not explained. The accounting records maintained were incomplete and it was not possible to establish, amongst other matters:
the reasons for payments made to Mr Heard totalling 201,986
the reasons for payments totalling 639,549 made to a connected third party
the reasons for payments totalling 114,263 made to another third party
the reasons for, and the beneficiaries of, cash withdrawals totalling 63,035
the reasons for payments made to a company of which Mr Heard was a director, totalling 124,127
the extent of any PAYE/NIC liabilities in the last three years of trading
the number and identity of staff employed by the Company and over what period
whether the Company operated any bank account after 22 November 2012
Commenting on the disqualification, Cheryl Lambert, Chief Investigator at the Insolvency Service, said:
This is a significant ban, reflecting the severity with which the Insolvency Service considers the conduct of the director.
Mr Heard oversaw an operation that, over a very long period, did not submit accurate information to the tax authorities and, after de registering for VAT, participated in a scheme to use one company to reduce the VAT exposure of a connected company. The consequence is that over 1/2m was not properly reported nor paid to HMRC.
Mr Heards conduct of LVHs affairs fell extremely short of the standards of competence and integrity expected and to protect the integrity of the economic system, the Insolvency Service will use its powers to protect the business world, and the general taxpayer, when directors act in this way.