Disqualification on menu for curry restaurant director

The director of a Brick Lane Indian restaurant, in London’s curry hotspot, has been disqualified from acting as a company director for eight years for failing to provide proper accounting records for his company or pay some £200,000 in taxes, following an Insolvency Service investigation

MD Taj Uddin was the director of Spice of Sylhet Ltd which traded as Papadoms. The Insolvency Service said that without proper accounting records, it was not possible in particular to verify the true level of takings, or the reasons for payments of £265,418 including cash withdrawals of £27,827 from the company bank account during the period November 2013, when the company was set up, to April 2015 when it entered liquidation.

The fact that no wage records were produced meant it was not possible to establish the number of staff employed, level of wages paid and the amounts of tax and National Insurance contributions (NICS) due.

The investigation also found Uddin had deliberately failed to ensure that Spice of Sylhet Ltd had properly and accurately accounted for VAT to HMRC.

At liquidation, the company owed in excess of £199,000 to HMRC in relation to arrears of VAT, PAYE and NICs. Uddin, however, had disclosed in the statement of affairs that the debt to HMRC was £21,434.

An HMRC investigation revealed that during the period of trading, the restaurant takings had been deliberately concealed. HMRC notified Uddin of this and assessed the level of concealment as £78,128 VAT and also imposed civil penalties of £73,113.

David Brooks, a chief investigator with the Insolvency Service, said: ‘The period of this disqualification contained within the undertaking signed by Mr Uddin sends a clear message to other company directors that: If you fail to comply with statutory legislation because you do not maintain sufficient company accounting records to satisfactorily explain payments and transactions of the business or your company.’

HMRC background note:

Most businesses pay their taxes, but when a business goes under, the public purse may be left with large irrecoverable tax debts. HMRC, like any other creditor, has a duty to work with insolvency practitioners to work out whether the directors acted correctly at all times.

From 6 April 2012, HMRC can require employers to pay a security where there is serious risk, based on past behaviour that they will not pay their PAYE or Class 1 NICs. 

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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