Mr Gary Carcary of Glasgow, has been disqualified as a director for a period of five years for breaching his fiduciary duty to the company by causing the company to undertake accounting transactions that benefited him, thereby reducing the balance he owed to the company on his overdrawn Directors Loan Account (DLA) to nil.

This action resulted in an additional liability of 267,126 to HMRC, at a time when the company had ceased trading.

Mr Carcary (58) was the sole director of BAUR (Scotland) Ltd, a plumbing and heating company, of Glasgow, from 21 July 2011 until it went into liquidation on 4 July 2014 with an estimated deficiency of 38,885.

According to professionally prepared and signed accounts for the year ended 31 March 2012, Mr Carcarys DLA had an overdrawn balance of 104,735. Despite this, Mr Carcary continued to draw funds from the company through his DLA. At 31 March 2013, when the company ceased trading, the DLA had an overdrawn balance of 273,747, an increase of 271,031 over the whole period.

The companys accountants stated Mr Carcary had advised them it was not his intention to repay this money and that he intended it to be his remuneration from the company and not a debt. Mr Carcary was advised that this would create a sizeable PAYE and National Insurance liability payable by the company. The accountant declared a net bonus of 225,702 to clear the DLA which created a PAYE and National Insurance liability to HMRC payable by the company of 267,126.

As a result of these transactions the companys financial position became significantly worse and the company had no reasonable prospect of being able to pay the additional liability as it had ceased to trade.

Mr Carcary gave an undertaking to the Insolvency Service not to act as a director or be involved in the management of a limited company from 19 February.

Commenting on the disqualification, Robert Clarke, Head of Company Investigation at the Insolvency Service said:


Directors who put their own personal financial interests above those of creditors damage confidence in doing business and are corrosive to the health of the local economy.

This ban should serve as a warning to other directors tempted to help themselves first; you have a duty to your creditors and if you neglect this duty you could be investigated by the Insolvency Service and removed from the business environment.

The undertaking signed by Mr Carcary sends a clear message to other company directors that if they run a business in a way that is detrimental to either its customers or its creditors, they will be investigated by the Insolvency Service and as a result removed from the business environment.