Testimonial – Director Avoids Disqualification for Allegedly Trading to the Detriment of HMRC

There are many alleged offences that the Insolvency Service investigates directors for, with a view to instigating director disqualification. One of the more common is for a company to be ‘Trading to the Detriment of HMRC’ at the time which it goes into insolvency. This usually means that other creditors have been paid but not HMRC. In other words, the monies due to HMRC – PAYE, NIC, VAT and Corporation Tax – are being used by the company to fund its on-going trading. In this testimonial, our client, a director in the company, was accused of causing the company to trade to the detriment of HMRC, explains how we persuaded HMRC to drop the case.

Director Disqualification Solicitors

Our Client Receives a Section 16 Letter from the Insolvency Service

“At the age of 74 the last thing I needed was to receive a letter from the Insolvency Service (‘IS’) which my Solicitors advised me was a Section 16 Letter, stating that based upon my conduct as a Director of my failed limited company, they wished to disqualify me as a Director.  To say I was shocked by receiving this letter is an understatement.  

Having been a Teacher for most of my life and having gone into business with my family, the very last thing I needed was the threat of Director Disqualification proceedings against me.

 I needed professional advice and somebody that could hold my hand and navigate me through this process.

 I found Neil Davies & Partners (‘NDP’) through the internet.  Having read their client reviews and articles on Director Disqualification, I decided to instruct them. 

Sukhbir Mall, a Director in NDP, and his assistant, Richard Shepherd, met me within a matter of days.  They explained and set out very clearly and in simple language what the IS were alleging against me and explained their threat of issuing director disqualification proceedings against me.”

The Allegations of Unfit Conduct Included Trading to the Detriment of HMRC

“The IS had alleged that I had caused the Company to trade to the detriment of HM Revenue & Customs.

They made me feel at ease and explained matters in language that I could understand, rather than using the jargon used by the IS.  They immediately engaged with the IS setting out the reasons why the imminent threatened proceedings and the case they wished to advance against me, would not succeed.

The IS were adamant about issuing proceedings against me.  However, Sukhbir and Richard responded to all the queries raised by the IS and made it clear that any case advanced would not succeed at Trial.

Following various exchanges and a number of very carefully crafted responses, the IS confirmed that they no longer wished to continue with their case.  It was a huge relief to receive that news.

I can whole heartedly say that I was very impressed with Sukhbir and Richard who listened to what I had to say and stood up for me.  I would recommend NDP to anyone who faces a similar situation.”

Mrs. K (Herefordshire)

Contact us if Threatened with Director Disqualification for Trading to the Detriment of HMRC

In recent years we have seen more and more of this type of director disqualification case. It also seems that the Insolvency Service is talking an increasingly hard line with this type of case with director disqualification periods for the offence being longer. This means that to be able to negotiate down the period, or convince the IS to drop the case, a compelling explanation must be found.

This is where our director disqualification solicitors come in. Our team members have acted in many director disqualification cases, both for and against the Insolvency Service, and have had much success in convincing them to drop director disqualification investigations, as in this case. Click here to see some more of our testimonials.

In addition, one of our Directors, Neil Davies has assisted in authoring one of the leading legal text books on director disqualification – Mithani on Directors’ Disqualification – which means we are experienced in providing the right advice to you, or your client, in this detailed and complex area of law.

Please contact us or call us on 0121 200 7040 if you are threatened with Director Disqualification.