Restaurateur served 12-year ban over £1m tax fraud

A jailed restaurateur has been banned from running companies for 12 years after he was found to owe HMRC over £1m in tax

Lam Seong, from Barnet in north London, was the sole director of Novari Ltd and Novari (at the O2) Ltd.

Incorporated in 2012, the two companies traded as the Water Margin Chinese Restaurant in Portsmouth, as well as the Water Margin Chinese Restaurant and Water Margin Jazz Club in Greenwich.

Each company had an annual turnover in excess of £1m. However Seong registered the companies falsely with HMRC, describing them as arts-based businesses with estimated annual turnovers of £10,000 and £80,000, which were significant under-valuations.

He then failed to file VAT returns for either company, which caused HMRC to raise assessments on the companies’ behalf based on their falsely declared annual turnovers. The assessments were, as a result, for much smaller amounts than was really owed – sometimes only for hundreds of pounds.

Seong caused the companies to pay the smaller assessments rather than correcting the error, which meant over £1m in tax went unpaid over four-and-a-half years.

In July 2016, an HMRC investigation uncovered the fraud, and the restaurants ceased to trade soon after. Seong put both companies into liquidation in winter 2016 and autumn 2017 respectively.

In November 2018, Seong pleaded guilty to two counts of being knowingly concerned in fraudulent evasion of VAT and was sentenced to three years in prison.

HMRC then worked with the Insolvency Service to secure Seong’s disqualification as a director in addition to his custodial sentence.

David Brooks, chief investigator for the Insolvency Service, said: ‘Lam Chin Seong demonstrated a wilful disregard for the tax authorities and a 12-year ban prevents him from using limited liability to carry on his business practice in such a way.

‘This case illustrates the excellent day-to-day relationship the Insolvency Service has with HMRC, and we will continue to work with our partners to prevent misconduct.’

Pat Sweet | 26-07-2019

0
Be the first to vote
Subscribe