Tom D'Arcy

Father and son disqualified for 8 years

The debts in this matter were significant however failure to pay PAYE/ VAT is something we see time and time again and can be evidence of wrongful trading (trading with the knowledge of insolvency) which in turn can lead to disqualifications and potential recovery action against the directors personally.

Failing to pay crown monies occurs in all sectors when cash flow is tight as directors will focus on paying suppliers and employees as they are fundamental to ongoing trade.  This is particularly relevant in sectors with high staff costs such as restaurants/ leisure and in construction where we see the failure to pay over CIS deductions.

With the introduction of real-time information submission to HMRC, HMRC should be aware of poor compliance and missing payments much more quickly.  Once a company is with HMRC recoveries team, matters can very quickly escalate to a winding up petition being issued which may cause the company to have to cease trading.  HMRC will always look at a company’s compliance record and a poor compliance record can lead to HMRC being unwilling to consider any process other than winding up.

Please see the link for further details on this case http://www.insolvencynews.com/article/18420/industry/father-and-son-directors-banned-for-eight-years