Gurvinder Luthra, director of a restaurant in Londons Covent Garden, has been disqualified from acting as a director for 10 years for submitting false VAT returns, failing to keep records and filing incorrect accounts.
Mr Luthras disqualification follows an investigation by the Insolvency Service.
Pinnacles (UK) Limited began trading as a restaurant in Covent Garden in 2006. In 2010 the company opened a second restaurant in London. Sales were lower than anticipated and the company struggled to pay high overheads. In November 2013 the company ceased to trade, and on 18 February 2014 it entered into Liquidation.
The investigation found:
following an inspection of the Companys records in 2012, HMRC discovered the company had deliberately under-declared the amount of VAT due on returns between September 2010 and May 2012
Pinnacles failed to file any further returns and did not make any payments to HMRC
From 1 September 2010 to liquidation Pinnacles received at least 334,456 (including VAT refunds totalling 97,687) and expended 334,461 of which no payments were made to HMRC
Mr Luthra filed dormant accounts from 2007 to which he knew were inaccurate given that the Company started trading in November 2006
Mr Luthra also failed to ensure that Pinnacles maintained adequate accounting records, and failed to deliver them up to the Liquidator despite requests that he should do so. As a consequence, amongst other things, it has not been possible to establish the recipients of, and reasons for, payments totalling 23,900 from the Companys bank account and the reasons for payments made to a former company director totalling 28,183. At the date of Liquidation HMRC were owed at least 155,980.
Commenting on the disqualification, Cheryl Lambert, Chief Investigator at the Insolvency Service, said:
Directors who submit false information to HMRC and dont pay their tax bills can expect to be investigated by the Insolvency Service and enforcement action taken to remove them from the market place.
Mr Luthra caused HMRC to lose nearly 156,000, by filing false returns and not making payments. He also filed false accounts and did not maintain records.
Taking action against Mr Luthra is a warning to directors that they need to consider and take seriously, their duties and obligations.