Steven Heard, a haulier from Kent, has been disqualified for over eight years for not properly dealing with the taxation affairs of LVH Services Ltd and failing to ensure the company had adequate records to account for over £1m of transactions and some £500,000 of VAT owing
An investigation by the Insolvency Service discovered that at least £509,370 of VAT was neither reported nor paid to HMRC and transactions totalling £1,142,960, the majority of which were to recipients connected to Heard, had insufficient explanations or supporting documentation.
LVH submitted a VAT reclaim for the December 2011 quarter totalling £64,948, but HMRC’s inspection of the company’s records in May 2012 found LVH actually owed £215,881 in relation to VAT. LVH de-registered for VAT on 1 April 2012.
On inspecting the records of an associated company in 2013, HMRC established that from April 2012 LVH had been issuing invoices to that associated company within which VAT totalling £365,491 was charged. This was after LVH had been already been de-registered for VAT.
These transactions created a benefit for that associated company and £219,293 should have been paid to HMRC on these transactions. LVH was then re-registered for VAT and, at liquidation, £654,960 was due including interest, surcharges and penalties, in relation to VAT alone.
LVH entered liquidation in February 2014. The statement of affairs sworn by the director disclosed no assets and liabilities totalling £929,952. The liquidator realised assets totalling £6,000 and established that the liabilities totalled at least £986,628.
The Insolvency Service said the company’s internal records were not maintained properly, and over £1m of payments to Heard and entities connected to him are identifiable but not explained.
It was also not possible to establish, amongst other matters, the extent of any PAYE/NIC liabilities in the last three years of trading; the number and identity of staff employed by the company and over what period; and whether the company operated any bank account after 22 November 2012.
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.’
