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Disqualifications for directors involved in tax avoidance scheme (15 August 2017)

Date: 15/08/2017
Duncan Lewis, Legal News Solicitors, Disqualifications for directors involved in tax avoidance scheme

An Insolvency Service investigation has led to the disqualification of two directors who entered into a tax avoidance scheme.

Timothy Richard Edmunds, 52, from Swansea in South Wales, was disqualified from acting as a director for five years.

His wife, Annette Edmunds, also 52 and from Swansea, was disqualified for four years.

On 17 July 2017, the Secretary of State for Business Energy and Industrial Strategy accepted disqualification undertakings from Timothy Richard Edmunds and Annette Edmunds, with effect from 7 August 2017.

Mr and Mrs Edmunds were directors of ESP Strategies Ltd, which went into liquidation on 25 November 2015.

ESP Strategies Limited was incorporated on 3 July 2005, with its registered office and trading address at 718 Gower Road, Upper Killay in Swansea.

The investigation found that ESP Strategies Ltd had entered into a tax avoidance scheme involving the issue of shares totalling £240,000 to directors, which were only partly paid for.

Mr and Mrs Edmunds agreed to a number of transactions ending with the surrender of the shares, which resulted in £230,400 of uncalled share capital becoming unavailable.

The transactions took place at a time when the directors knew that the company had an outstanding debt to HMRC – the sole creditor in the liquidation, with a claim of £133,245.

Chief Investigator at the Insolvency Service, Sue MacLeod, said:

“If your business engages in transactions in the run up to liquidation which are detrimental to any of its creditors, the Insolvency Service may investigate you – leading to your removal from the business environment.”

A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot act as a director of a company; take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership; or be a receiver of a company’s property.

Disqualification undertakings are the administrative equivalent of a disqualification order, but do not involve court proceedings – those subject to a disqualification order are bound by a range of other restrictions, however.

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