Mother and Son Directors Ban for undeclaring tax

Mother and son who ran a restaurant in Blackburn have been disqualified after they under-declared the company’s full cash takings to the tax authorities.

Ching Yau Yu and Vincent Wai Kit Yu a mother and son team, were directors of Kai Hing Limited. They ran the Yu and You Restaurant and Bar, a Chinese eatery in the Copster Green area of Blackburn.   It once featured in the TV programme, Ramsay’s Best Restaurant, in 2013.

Despite being a popular restaurant, Kai Hing Limited entered difficult trading conditions and due to not being able to pay its debts was liquidated in January 2017, owing their creditors nearly £385,000.

Once an independent insolvency practitioner was appointed and in the process of winding-up the business, they discovered a substantial tax discrepancy and reported Ching Yu and Vincent Yu to the Insolvency Service.

The Insolvency Service then carried out a full investigation where it came to light Vincent and Ching caused the company to under-declare its full cash takings since Kai Hing Limited had started trading in September 2011.

What’s more Vincent and Ching Yu had already been warned that they had failed to declare more than £600,000 worth of additional sales between October 2011 and January 2016, which would have led to additional tax liabilities of just under £120,000. Despite this warning the directors continued to trade until January 2017. They had submitted quarterly returns and paid in full but had failed to make payments towards the underpaid tax liabilities from previous years.

Both directors agreed to provide an undertaking to the Secretary of State for Business, Energy and industrial Strategy, which prevents them from becoming directly or indirectly involved in the promotion, formation or management of a company.

Ching Yu started her 4-year ban from 14 December 2018 and Vincent Yu received a 7 year ban effective from 24 December 2018.

Isobel Brett, Director, Bretts Business Recovery, said “The ban reflects Kai Hing Ltd’s neglect of their responsibilities as directors and also their disregard to the warnings previously given. If these were deliberate under-declarations then HMRC have the power to pursue the directors personally. Directors take heed!”

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