A director who attempted to sell his shareholding in a company which failed to pay its taxes has been fined and disqualified, a report has revealed.
According to the Insolvency Service, Marc Neville Green was appointed a director of Smarta Security Limited, a company which supplied security and cleaning services, in November 1999.
However, the company fell into financial difficulties in 2016 and Mr Green disposed of his interests in the firm, selling it to a third party in January 2016.
But the company entered into liquidation proceedings just one month later, 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 HM Revenue & Customs (HMRC).
Despite no longer having an interest in 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.
Erin Duffy, an Associate Solicitor with Palmers who specialises in commercial debt recovery, said: “Following the introduction of the Small Business, Enterprise and Employment Act 2015, the Insolvency Service has greater powers and is able to go after directors if it has evidence to suggest that they acted unlawfully.
“Since 2018, the Insolvency Service has reportedly secured more than 1,200 convictions and also has the power to seek compensation from the director of any insolvent business.
“Anyone who is owed money by a company that is in administration or liquidation and suspects wrong doing, should flag their suspicions to the official administrator and also seek specialist legal advice.”
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