A catering contractor who failed to register for VAT despite earning well above the registration threshold has been fined and banned from running a company for seven years.
The report, published by the Insolvency Service, follows the case of Peaches Limited and sole director Patrick Olusoji Ekundayo.
After incorporating in 2010 and trading for three years, the company was advised by its accountant to register for VAT as its turnover had “significantly exceeded” the VAT registration threshold (currently £85,000). According to the regulator, the company hosted up to 60 events per year, charging between £10,000 and £15,000 per day.
But it was discovered in 2017 that the director had failed to register Peaches Limited for VAT, resulting in HM Revenue & Customs (HMRC) forcibly registering the company, backdated from March 2013.
Despite the regulator’s intervention, the catering contractor failed to submit any VAT returns and in July 2018, went into liquidation owing “more than £500,000 in taxes”.
This included £128,000 in penalties, as well as £264,000 of underdeclared Corporation Tax and National Insurance contributions.
Commenting on the report, Lawrence Zussman, Deputy Head of Insolvent Investigations at the Insolvency Service, said: “Patrick Ekundayo failed to register his company for VAT and did not submit any VAT returns throughout the company’s lifetime resulting in more than £500,000 in lost taxes to the public purse.
“This behaviour was deliberately non-compliant and we have now removed him from being involved in any business for a period of seven years.”
For help and advice with related matters, please get in touch with our expert VAT accounting team today.
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