A payroll services boss has been banned for orchestrating a multi-million-pound tax avoidance scheme.
The case puts a spotlight on company owners and should serve as a reminder that they are subject to strict conditions over keeping records.
The High Court issued a disqualification order lasting 11 years to the sole director of Magnetic Push Ltd.
The company was purportedly operating as a payroll services company and entered voluntary liquidation within a year of being formed.
However, the liquidator found the director completely uncooperative when requesting the company’s statutory records.
This was reported to the Insolvency Service, which investigated and found that the company was acting as an umbrella company in part of a tax avoidance scheme.
He had declared a VAT liability of just £609 but the tax authorities claimed more than £4 million from Magnetic Push in the liquidation.
Failure to keep accounting records can lead to a £3,000 fine and/or disqualification from acting as a director, as this case indicates.
If you haven’t reviewed your record keeping in a while, now is a great opportunity to do so.
Key points for company and accounting records
You must keep:
You must also keep details of:
Limited companies have to keep a register of ‘people with significant control’ (PSC), which must include details of anyone who:
When it comes to accounting records you must be able to evidence:
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