Restaurant director banned for not keeping proper records and concealing takings

A director from an Indian Restaurant from the famous London Brick Lane district has been disqualified from acting as a company director for eight years after failing to provide proper accounting records.

Mr MD Taj Uddin, 37, was the director of Spice of Sylhet Limited which traded as Papadoms; where he failed to keep proper business records, including details of staff and wages.
An investigation by the Insolvency Service found Uddin deliberately failed to ensure that Spice of Sylhet Ltd had accounted properly for VAT to HMRC.

Without proper records, investigators were unable to verify the true level of takings. They were also unable to ascertain any reasons for payments of £265,418 including cash withdrawals of £27,827 from the company bank account between November 2013 and April 2015.

Mr MD Taj Uddin also produced no wage records, meaning it was not possible to establish the number of staff employed. Wages were also unknown and therefore the amounts of tax and National Insurance contributions due.
During the time of liquidation, the company owed almost £200,000 to HMRC. However Uddin disclosed a debt to HMRC as £21,434 in the statement of affairs, massively short of the HMRC’s estimate. The HMRC investigation said that the takings had been deliberately concealed. It was believed that the level of concealment as £78,128 VAT and they also imposed Civil Penalties of £73,113.

David Brooks chief investigator with the insolvency service said: “The period of this disqualification contained within the undertaking signed by Mr Uddin sends a clear message to other company directors that: If you fail to comply with statutory legislation because you do not maintain sufficient company accounting records to satisfactorily explain payments and transactions of the business or your company records conceal the true level of takings and sales this will not be tolerated.

“Much of the public service is funded by the correct amount of taxes being paid. By not declaring and paying the correct amount of taxes, Mr Uddin has ultimately deprived the public services and the public from receiving the services it deserves. The Insolvency Service therefore will not hesitate to remove them from the business environment in order to protect the public.”

Isobel Brett Director at Bretts Business Recovery commented ‘Sadly this is typical of some restaurateurs, often dealing in cash, not keeping records and avoiding VAT. However this strategy as well as being illegal is not sustainable and HMRC will catch-up with them, particularly in light of the HMRC’s drive to recover lost revenue at present’