Two Preston-based brothers, Asif Ibrahim Bux and Firoz Ibrahim Bux, directors of property development firm Goldace Estates Ltd, have been disqualified for 16 years in total for failure to pay VAT worth around 1.3m to HM Revenue and Customs (HMRC).
The disqualifications, which started on 13 September 2013, follow an investigation by the Insolvency Service.
Asif Ibrahim Bux, previously known as Asif Ibrahim Patel and Firoz Ibrahim Bux, previously known Firoz Ibrahim Patel have both given undertakings to the Secretary of State for Business, Innovation and Skills that they will not control or manage a company for eight years each until September 2021.
Following the investigation, the Bux brothers did not dispute that under their control, Goldace Estates Ltd sold a commercial property in Preston in December 2007 for 8,783,125 and 1,308,125 in VAT.
The company had been advised by their solicitor that VAT was chargeable on the sale and were issued a VAT invoice which enabled them to collect the sales tax. They however did not declare this to HMRC in the companys VAT return in January 2008.
The Bux brothers could not account for the VAT they collected, and therefore could not pay it to HMRC.
At the time it went into liquidation, Goldace Estates Limited owed 2,860,863 to creditors. Of this, 1,737,546 was owed to HMRC which included the 1,308,125 VAT, penalties and interest. There is additional contingent claim from HMRC for 1,456,194 regarding Goldace Estates Ltds participation in a tax avoidance scheme.
Commenting on this case Ken Beasley, the Official Receiver in the Public Interest Unit, said,
The Insolvency Service will not hesitate to use its enforcement powers to investigate, disqualify and remove from the business environment directors whose companies defraud the public purse.
This is not a victimless crime, and companies that do not pay their taxes deprive the taxpayer of the funds needed to run public services."
Any directors tempted to cheat should be warned that the Insolvency Service will rigorously pursue anyone who fails to abide by the rules.