Crime

Director banned after trying to reclaim £3.3m in VAT

The issue occurred when Smalley, who was the director of Kenza Village Limited, submitted a reclaim for VAT he said he had paid, totalling more than £3.3m

The director of metals and electrical goods store, David Smalley, has been disqualified for four years after he failed to keep records and told investigators he was not in control of his company after trying to reclaim £3.3m in VAT.

The issue occurred when Smalley, who was the director of Kenza Village Limited, submitted a reclaim for VAT he said he had paid, totalling more than £3.3m. However, the tax authorities found that “no such amount had been paid”. 

The tax authorities subsequently wound up Kenza Village Limited in the High Court in December 2015 and the Official Receiver was appointed liquidator, sparking an investigation by the government’s insolvency service.

It was found that Smalley had failed to ensure Kenza had “maintained or preserved” adequate accounting records during the entirety of his period as director of the company from February 2014 to December 2015.

When questioned in court, Smalley claimed that his role as director was so others could use him as a “front” for the business, and that he was paid small amounts by others who were the controlling influence in the company without officially being linked to it. 

The insolvency service has said it is not thought Kenza Village Limited “ever actually traded”.

Julie Barnes, chief investigator at the Insolvency Service, said: “David Smalley claimed that he was not the real director of Kenza and was instead being used to hide others who were the real controlling influences.The responsibility still lies with the company director and we will take action if the legal requirements placed on directors are not adhered to.”

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