Disqualification for mobile phone suppliers linked to £13m VAT fraud

The directors of a mobile phone company involved in deals traced back to fraudulent tax losses of over £13m have been disqualified from acting as directors for a total of 34 and a half years, following an investigation by the Insolvency Service

Neil Pursell, Adrian Sumnall and James Reed were all directors of Ace Telecom Trading Ltd (ATT) which traded as a wholesaler of mobile telephones and other electronic goods.

The company was wound-up in July 2013 owing more than £18m to HMRC and with an estimated total deficiency to creditors of £32m.

The three did not dispute that they caused or allowed ATT to participate in transactions which were connected to the fraudulent evasion of VAT, which they either knew or should have known about, and that ATT wrongfully claimed VAT from HMRC totalling almost £14m.

Pursell and Sumnall were also directors of Winnington Networks Ltd which was placed in to provisional liquidation on the application of HMRC in March 2014, after the court was satisfied that Winnington was involved in fictitious trading connected to a complex VAT fraud. Winnington was subsequently wound up with tax debts of approximately £6m.

Reed has been disqualified as a director for a period of 10 years and 6 months, and Sumnall and Pursell each for a period of 12 years.

Ken Beasley, Official Receiver at the Insolvency Service’s public interest unit, said: ‘The directors of Ace Telecom Trading Ltd were well aware of the risks of VAT fraud but nonetheless the company entered into transactions linked to the fraudulent evasion of VAT and wrongfully reclaimed VAT input tax of almost £14m.

‘VAT fraud represents a pernicious attack on the public finances and the periods of disqualification reflect the serious view taken of the conduct of the directors in this case.’

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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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