Restaurateur served up nine-year ban after hiding VAT from HMRC

A restaurateur behind Glasgow’s Cyan Restaurant has been disqualified for nine years after failing to pay a £195,000 VAT bill.

Based in Glasgow, David Cowan was the sole director of Avenbrae Ltd, the company behind Cyan Restaurant. The bar and bistro began trading on Stewart Street, Milngavie, outside Glasgow, in August 2014. But Cowan did not register the company for VAT until a year later, in August 2015.

He then failed to ensure the company filed quarterly VAT returns, which he was duty-bound to do as the company director. HMRC raised assessments on the company, which were only partially paid.

In June 2017, an HMRC investigation uncovered that the company had been concealing VAT since August 2014. In September 2017, HMRC requested immediate payment of the outstanding amount. At the same time, the business was hit as several new restaurants and a hotel in the area negatively impacted the number of customers.

By January 2018, Cowan had placed Avenbrae Ltd into a creditors voluntary liquidation (CVL). The company owed HMRC £195,000 in VAT, which included fines for unpaid tax and VAT due for the final quarter of trading. In addition, the company owed other creditors almost £23,000.

In August 2019, the Secretary of State accepted a disqualification undertaking from Cowan for nine years. Effective from 28 August 2019, he is banned from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.

Robert Clarke, chief investigator for the Insolvency Service, said: ‘David Cowan failed to observe his statutory duties as a company director to comply with VAT obligations, and his business gained a competitive advantage as a result, which is unacceptable behaviour.

‘Any other directors who behave in this way should expect an Insolvency Service investigation and a lengthy ban.’

By Philip Smith

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