Tax fraud marks end of road for haulier

A road haulage company director, has been disqualified for eight years after failing to maintain adequate company records and withholding some £175,000 due to HMRC

Gary Davies was the director of Surrey-based Longcross Transport Ltd, which went into liquidation in January 2015 owing at least £200,864 to creditors including £175,423 in respect of unpaid tax.

An investigation by the Insolvency Service found that Davies had failed to either maintain, preserve or alternatively deliver-up adequate accounting records.

As a result, it was not possible to ascertain whether Davies was a creditor of Longcross for £220,000, or alternatively whether he owed Longcross at least £796,479.

However, the Insolvency Service’s investigation did conclude that Davies purposefully withheld VAT from HMRC in order to keep the company trading between September 2012 and the date of liquidation.

In particular, VAT returns were not submitted to HMRC between March 2013 and October 2014. Longcross did produce a number of VAT returns, but these declared larger liabilities than assessed for the same period by HMRC, and had not been submitted.

Aldona O’Hara, chief investigator of insolvent investigations Midlands & West at the Insolvency Service, said: ‘Company directors have a duty to ensure businesses meet their legal obligations, including paying taxes and must not benefit themselves at the expense of creditors.’

O’Hara added: ‘Directors have a duty to ensure that their companies maintain proper accounting records, and, following insolvency, deliver them to the office-holder in the interests of fairness and transparency. Without a full account of transactions it is impossible to determine whether a director has discharged his duties properly, or is using a lack of documentation as a cloak for impropriety.’

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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