Wine and food store director disqualified for inaccurate tax returns

Director of Sandy Hill Food and Wine Limited, Harmon Singh Madhan has been disqualified from being a director for 5 years. The investigation into the business, which ceased trading on 04 March 2019, found that Mr Madhan failed to ensure that Sandy Hill Food and Wine Limited submitted accurate returns to HM Revenue & Customs (“HMRC”) for Value Added Tax (“VAT”) in respect of the quarters ended 31 July 2017 to 31 July 2018 and for Corporation Tax (“CT”) in respect of accounting periods ended 31 December 2015 and 31 December 2016 resulting in under declarations of tax liabilities that remained unpaid at the date of liquidation.

In April 2018 HMRC opened an enquiry into SHL’s CT return for the year ending 31 December 2016 which revealed that the declared turnover was less than the amount recorded on the till and in addition, that the till did not record all sales as the ‘No Sale’ button was frequently used for handling actual sales. Furthermore partial records, including till readings were provided to HMRC in their enquiries which indicated that sales had been understated. Using the available information, HMRC calculated that sales totalling £87,552 had been omitted from the CT return for the year ended 31 December 2015 and £115,525 had been omitted from the CT return for the year ended 31 December 2016.

HMRC calculated the total CT due on the underdeclared sales as £39,546. HMRC’s claim in the liquidation has not yet been finalised but should include £77,798 for underdeclared CT and underdeclared VAT plus additional sums for penalties, surcharges and interest.

As of June 2020, Mr Madhan has been banned for 5 years from taking part in the promotion, formation or management of a company by The Insolvency Service.