BusinessCorporate FinanceUnderpaid tax to blame for director disqualifications

Underpaid tax to blame for director disqualifications

72% rise in company director criminal activity - with tax most common reason

Underpaid tax has been cited as the most common reason for the
disqualification of company directors, according to research by City law firm
Wedlake Bell.

Other factors include the failure to keep correct accounting records, theft
and fraud, and continuing to trade while the company is insolvent.

The research also revealed a 31% jump in company director disqualification
proceedings launched over the past year.

Disqualification proceedings were launched against the directors of 1079
companies in 2008/09, up from 820 in 2007/08.

The firm said that directors are most often pursued for underpaying tax to
HMRC, with the directors of 403 companies – or 37% of all cases launched in
2008/09.

Edward Starling of Wedlake Bell said the figures show that despite HMRC
advocating greater leniency towards businesses facing cash flow problems, the
Insolvency Service is becoming more aggressive.

‘Many directors will choose to pay suppliers first as they consider this more
important for the immediate survival of their business. However, they must not
forget that failing to pay HMRC while continuing trading could eventually land
them into trouble personally,’ he said.

Further Reading:

Whittaker
to leave RBS

FD
prosecuted by anti-corruption unit

Related Articles

Grant Thornton recruits new corporate finance partner

Accounting Firms Grant Thornton recruits new corporate finance partner

10m Emma Smith, Managing Editor
Total fraud value at £2bn five-year high, finds BDO

Accounting Firms Total fraud value at £2bn five-year high, finds BDO

11m Stephanie Wix, Writer
MHA MacIntyre Hudson appoints corporate finance director

Accounting Firms MHA MacIntyre Hudson appoints corporate finance director

11m Stephanie Wix, Writer
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
KPMG announces senior partner promotion in Newcastle

Accounting Firms KPMG announces senior partner promotion in Newcastle

11m Stephanie Wix, Writer
Independent city firm reports 70% growth

Accounting Firms Independent city firm reports 70% growth

11m Stephanie Wix, Writer
Tax avoidance crackdown sees 80% jump in additional HMRC revenue

Accounting Firms Tax avoidance crackdown sees 80% jump in additional HMRC revenue

11m Stephanie Wix, Writer
Making Tax Digital: the "unexpected item in the bagging area"

Accounting Standards Making Tax Digital: the "unexpected item in the bagging area"

11m Stephanie Wix, Writer