Ex-boss of Lancaster Indian restaurant banned for tax evasion

Babar Elephant in Morecambe Road, Lancaster. Photo: Google Street View
Babar Elephant in Morecambe Road, Lancaster. Photo: Google Street View

The former boss of a Lancaster Indian restaurant has been banned for three-and-a-half years for evading tax.

Aftab Ali owned a chain of Lancashire restaurants including Babar Elephant in Morecambe Road, as well as two eateries in the Wigan area and another in Pendle.

But an investigation by the Insolvency Service found that Mr Ali, who traded as Barbar Elephants Ltd, ended up owing HM Revenue and Customs (HMRC) more than £340,000.

Mr Ali, of Grange Avenue, Rossendale, has now been disqualified as a company director until July 2023.

His enterprise ran until the end of October 2017, when the company collapsed owing nearly £350,000.

An inquiry by the Insolvency Service showed that the company started to submit late VAT returns between 2016 and the start of 2017, with total liabilities of £140,496, of which £101,359 is still outstanding.

Mr Ali then failed to make any VAT returns for the final quarters before the business crashed.

An assessment calculated that he owed £118,198 for the period – with non-payments resulting in £38,404 in surcharges.

While Barbar was found to have made a payment of £39,136 in March 2017, this only covered part of their historical debts and the firm still owed £287,853 in VAT.

Meanwhile trade creditor debts had dropped from £114,293 to £59,177.

With pay-as-you-earn tax, National Insurance credits and corporation tax factored in, the final bill to HMRC was £340,056.

Analysis of Barbar’s bank accounts between December 2 2016, and cessation showed receipts totalling £1,310,901 and payments out totalling £1,342,841.

Of the £1,342,841 paid out, £335,974 was paid to trade creditors, cheque payments totalling £444,004 were made, of which £39,136 was paid to HMRC, transfers totalling £130,993 were made and payments totalling £117,500 were made to a connected party of the director.

The four restaurants are now understood to be trading under different management.