Two brothers have been banned from being company directors for 16 years after failing to pay VAT worth £1.3m.
Asif Ibrahim Bux and Firoz Ibrahim Bux, directors of property development firm Goldace Estates Ltd, have been disqualifed following an investigation by the Insolvency Service.
Following the investigation, the Bux brothers did not dispute that under their control, Goldace Estates Ltd, which had an office in Preston, sold a commercial property in Preston in December 2007 for £8,783,125 and £1,308,125 in VAT.
The company had been advised by their solicitor that VAT was chargeable on the sale and were issued a VAT invoice which enabled them to collect the sales tax.
They however did not declare this to HMRC in the company’s VAT return in January 2008.
The Bux brothers could not account for the VAT they collected, and therefore could not pay it to HMRC. At the time it went into liquidation, Goldace Estates Limited owed £2,860,863 to creditors.
Of this, £1,737,546 was owed to HMRC which included the £1,308,125 VAT, penalties and interest.
There is additional contingent claim from HMRC for £1,456,194 regarding Goldace Estates Ltd’s participation in a tax avoidance scheme.
Ken Beasley, the Official Receiver in the Public Interest Unit, said: “The Insolvency Service will not hesitate to use its enforcement powers to investigate, disqualify and remove from the business environment directors whose companies defraud the public purse. “This is not a victimless crime, and companies that do not pay their taxes deprive the taxpayer of the funds needed to run public services.
“Any directors tempted to cheat should be warned that the Insolvency Service will rigorously pursue anyone who fails to abide by the rules.”
Asif Ibrahim Bux, previously known as Asif Ibrahim Patel and Firoz Ibrahim Bux, previously known Firoz Ibrahim Patel can not control or manage a company for eight years each until September 2021.
Goldace Estates Limited, which traded from Fishwick Park, Mercer Street, Preston was formed in April 2003 and was placed into administration on 6 July 2011 and into creditors voluntary liquidation on 27 March 2012.