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Director Disqualification for Misleading HMRC

Haulier Receives 8 1/2 Years Director Disqualification for Misleading HMRC. 

The consequences of misleading HMRC can be very serious, as in this case where the Insolvency Service  and confirmed that Mr Steven Ronald Heard  (‘Mr Heard’) of Chatham, Kent provided a director disqualification undertaking for a period of eight and a half years commencing from 10 May 2016. This story looks at the details of the case, in which Mr Heard’s company owed HMRC c.£655,000 in VAT alone, before suggesting how we can help if faced with director disqualification.

The Details of this Director Disqualification Case

The company LVH Services Ltd (the ‘Company’) was a freight haulage provider operating from Sheerness Docks in Kent that was found to have not dealt with its VAT affairs properly or maintained and preserved its accounting records, as required by Law, as detailed below:

  • The Company was placed into liquidation on 12 February 2014 owing its creditors almost £1m. After an investigation it was found that the Company owed HMRC almost £655,000 in respect of VAT alone, even though part way through its trading the Company had been de-registered for VAT. The Insolvency Service concluded that the Company had been misleading HMRC by invoicing a connected company with VAT added to those invoices. Those monies were not in turn remitted to HMRC.
  • In addition, in the period up to the date of liquidation, Mr Heard and entities connected to him were found to have received the total sum of over £1m from the Company to include cash payments totalling in excess of £63,000.00.  The reasons for those payments could not be explained from the Company’s accounting records.
  • Further, the number of and the identity of the staff of the Company could not be ascertained from the books and records as well as the extent of any liability of the Company to pay PAYE and NIC to the crown.

Commenting on the director 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.

 Mr Heard’s conduct of (the Company’s) 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 director’s act in this way.”

Our Comment on this Director Disqualification Case

The length of this director disqualification undertaking, 8 ½ years, is not surprising. Misleading HRMC, failing to pay over £650,000 of VAT owed to HMRC and failing to maintain adequate accounting records, whilst the director benefited personally, meant this was an easy disqualification decision for the Insolvency Service.

It may be the case (and we would not be surprised to hear) that Mr Heard may also face prosecution by HMRC or other authorities for his actions.

Contact us if you are Facing Director Disqualification

As director disqualification specialists, our solicitors are experienced in defending directors who are facing director disqualification. It is always the case that the earlier that you seek and obtain legal advice when you are first written to by the Insolvency Service about an investigation the better. That is so that we are better able to advise you as to your options and the way forward. Director disqualification is not inevitable and we have successfully reduced the period of disqualification given or convinced the Insolvency Service to drop the case on many occasions. Click here for some testimonials from directors we have defended successfully.

If you are under investigation for director qualification, please contact us, call us today on 0121 200 7040 or email (law@ndandp.co.uk) us a copy of the letter that you may have received from the Insolvency Service investigating your conduct. When you initially speak to NDP that will be at no cost and no obligation to you. No hole is too deep for us to make a difference!

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