£1m unaccounted expenses sparks ban for electrician

A Surrey electrician has been banned from running companies for seven years after failing to explain the legitimacy of close to £1m of expenses taken out of the company bank account

GJES London Ltd, an electrical contracting company, was incorporated in October 2011 and Grzegorz Jarnot became the sole director on the same day.

The company traded for over seven years before going into creditors voluntary liquidation in April 2019 as it was unable to pay its debts.

A subsequent investigation by the Insolvency Service found that from November 2017 to April 2019 more than £952,000 had been paid into GJES London’s bank account, with almost £958,000 paid out.

However, Jarnot failed to provide any accounting records to prove whether the bank deposits accounted for all GJES London’s income and whether the payments made out were legitimate expenditure.

Further enquiries found that GJES London was trading to the detriment of the tax authorities, having failed to pay all its VAT, PAYE and National Insurance and corporation tax from 2016 to 2019.

Investigators established that 18 months before it became insolvent, the company’s accounts declared that GJES London owed HMRC £39,500.

Despite this, £810,000 was paid out from GJES London’s company bank account in the last 15 months and no tax was paid. The tax authorities have claimed more than £255,000 in the liquidation.

Lawrence Zussman, deputy director of insolvent investigations at the Insolvency Service, said: ‘Grzegorz Jarnot’s conduct as a director was unacceptable.

‘Records show that close to £1m was deposited into and paid out from the company bank account. But Grzegorz Jarnot failed to explain the source of the funds, who payments were made to and whether it was legitimate business spending. He also failed to ensure the company paid its tax obligations.

‘Maintaining and keeping company records is a statutory requirement for all directors and Grzegorz Jarnot’s seven-year ban means he has been removed from the business environment for a substantial amount of time.’

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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