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Wednesday, 16 October 2013

Taxi firm director is disqualified for 8 years

The director of a Liverpool taxi firm called Yorkspeed Ltd, otherwise known as City Kabs has been banned for 8 years following an investigation by the Insolvency Service.

The financial records were unable to explain large cash withdrawals of £700k from the business, £40k of bank transfers to himself and family members, and thousand of pounds worth of cheques.

Robert Clarke, head of insolvent investigations north, at The Insolvency Service, said: “Directors who operate cash-based businesses have to maintain sufficient records to explain where the money has gone, and following insolvency make sure that such records are delivered up for scrutiny by the relevant bodies.

“By failing to do this, HM Revenue & Customs cannot be sure that all funds received by the company were used for legitimate purposes."

In the last 2 years of trading, the company ran up debts with HMRC which resulted in a debt of more than £225,000.

The threat of disqualification is there if a business becomes insolvent simply because the books and records of the company are scrutinized in an attempt to recover money for creditors. If you have taken money out and not paid it back to the company or have traded knowing full well that the company could not pay its debts then you run a big risk.

So, if in doubt, contact the professionals and consider stopping trading immediately to ensure that you do not make the creditors position worse.

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Many thanks for your comments. If you have a private business problem and you want advice give us a call on 0800 9700 539 or email me at keiths@companyrescue.co.uk. If you are a professional advisor with a troubled client, please suggest they visit www.companyrescue.co.uk or contact me as above.

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