Eight-year ban for director who failed to keep adequate records

Commercial Motor
May 2, 2017


The boss of Surrey-based Longcross Transport has been disqualified from being a company director for eight years after accruing debts of more than £200,000.

Gary Davies was disqualified for failing to maintain adequate records after his company went into liquidation owing at least £200,864 to creditors, including £175,423 to HMRC.

An investigation by the Insolvency Service found Davies had failed in his duty as a director to maintain, preserve or provide adequate accounts. As a result of the lack of records, it was not possible to establish whether Davies was a creditor of Longcross for £220,000 or if he owed Longcross £796,479.

Despite this lack of concrete evidence, the Insolvency Service’s investigation concluded Davies deliberately withheld VAT from HMRC to continue trading between September 2012 and liquidation in January 2015. During that time, 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 HMRC assessed to be allowable, and in any case those returns were not submitted.

In the light of this, Davies will be banned from acting as a company director or in any way controlling a limited company until 2025.

Aldona O’Hara, chief investigator of insolvent investigations Midlands and 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. Neglect of tax affairs is not a victimless action as it deprives the taxpayer of the funds needed to operate public services.

“Directors have a duty to ensure 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 if a director has discharged their duties, or is using a lack of documentation as a cloak for impropriety.”

by David Harris

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