A former director who sold his shareholding in a company shortly before it entered liquidation has been disqualified after it was revealed that substantial deficiencies had been left in respect of debts to the company’s creditors, including HM Revenue & Customs (HMRC).
According to the Insolvency Service, Marc Neville Green was appointed a director of security and cleaning services company, Smarta Security Limited, in November 1999 until it was sold to a third party in January 2016. Shortly before its sale, the company fell into financial difficulties and just one month after its sale by Mr Green the company entered into liquidation proceedings, sparking an investigation into the firm’s collapse.
Financial investigators found that Smarta Security Limited has failed to pay the correct amount of tax under Mr Green’s ownership, resulting in a “large deficiency to creditors”, one of which being HMRC.
Despite no longer being a director or shareholder of the company, a disqualification order was presented to Mr Green for causing Smarta Security to “trade to the detriment of the tax authorities” by failing to ensure that Smarta “complied with its statutory obligations to submit returns and payments as and when due”.
Commenting on the case, Ken Beasley, Official Receiver for the Insolvency Service, said: “Deliberate neglect of tax affairs is not a victimless action as it deprives the taxpayer of the funds needed to operate public services.
“Company directors have a duty to ensure businesses meet their legal obligations, including paying taxes, and the Insolvency Service will take action against directors who do not take their obligations seriously and abuse their position of trust.”
The disqualification order prevents the former business owner from running any further companies for a period of five years and six months from November 2019 among other restrictions.
The report comes after the first disqualified director was ordered to repay more than £500,000 to creditors following the introduction of the Small Business, Enterprise and Employment Act 2015, which enables the Insolvency Service to go after directors for misconduct occurring after the date companies enter into insolvency proceedings.
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