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Example 1

Mrs B, was the sole director of Spitari Limited and Spitari (at Wembley) Limited, operating Chinese restaurants in London and on the South Coast.

Each company had an annual turnover in excess of 拢1 million. However, they were registered falsely with HMRC, describing them as arts-based businesses with estimated annual turnovers of 拢10,000 and 拢80,000.

Mrs B failed to file VAT returns for either company, which caused HMRC to raise assessments on the companies鈥� under-declared estimated annual turnovers. The assessments raised were therefore for minimal amounts 鈥� sometimes only for hundreds of pounds -which the company paid.聽 This meant over 拢1 million in tax went unpaid over a four-and-a-half year period.

An HMRC investigation uncovered the fraud, and the restaurants ceased to trade soon after with both entering liquidation.聽 As a result of Mrs B鈥檚 involvement, she signed a director鈥檚 disqualification undertaking for a period of 12 years in relation to her misconduct.

Example 2

Mr K was the sole director of BMX Construction Limited, a construction company based in the West Midlands.

HMRC made unannounced visits to the company and found that it had under-declared its VAT liabilities by failing to disclose all its sales. In addition, the company failed to operate PAYE correctly by failing to register all eligible employees.

Furthermore, an additional bank account was identified in which sales income was deposited. HMRC raised an officer鈥檚 assessment for additional VAT liabilities of 拢200,000 as well as applying civil penalties of 拢90,000 to the company.

The company later entered liquidation owing 拢650,000 to creditors, including at least 拢365,000 for VAT and 拢55,000 for unpaid PAYE/NIC.聽 Following the company鈥檚 liquidation Mr K agreed to a director鈥檚 disqualification undertaking for a period of seven years.

Example 3

Mr X was the sole director of Crasstech Ltd, a carbon emissions allowance and metals trader based in Buckinghamshire. The company made sales of more than 拢38 million in the wholesale trade of carbon emission allowances and metals.

As part of an MTIC scheme, the company acted as a 鈥渂uffer鈥� and filed quarterly returns with HMRC attempting to fraudulently reclaim UK VAT that 鈥榤issing traders鈥� earlier in supply chains had failed to pay to HMRC.

The company entered into trading arrangements which were 鈥渢oo good to be true鈥�. Mr X caused the company to make payments to unconnected third parties totalling at least 拢7.38 million, despite having been warned on more than one occasion by HMRC officers of the risks of third party payments in the context of MTIC fraud.

The VAT fraud, including wrongful VAT reclaims against HMRC, resulted in tax losses of over 拢7.1 million.

Mr X was the sole director with responsibility for all aspects of the company鈥檚 trading, He was involved in pricing decisions which ran against any commercial logic and could only be explained in terms of this fraudulent scheme. His checks on trading partners were superficial and inadequate. He failed to act on indicators of commercial risk and continued to trade regardless.

The court decided that a Mr X must have been a knowing participant in this MTIC fraud and that a 15 year ban, the maximum period of disqualification, was appropriate.