Tax evasion, fraud, dormant company.

Which legal body could do the most damage?

Didn't find your answer?

Hi everyone, I am not an accountant but I am seeking some retribution on a company I took to court last year.

limited company (A) took a deposit for a bathroom and paid it into dormant company (B) the sum was £2430.

I tried to have the money returned via the bank (paid with a debit card) but the bank didn’t want to get involved.

I went through the process of having the deposit returned and ended up in small claims court. The court found in my favour but in the meantime, limited company (A) went into voluntary liquidation for around £680,000

After company (A) went into liquidation, company (B) popped up with the same director and staff etc.

I have waited patiently for company (B) to produce their accounts for thr period in question and they have.

my deposit was paid in to the company, October 2017.

The accounts have been made up as dormant until March 2018.

If they did this with my money, I’m sure they did it with many more deposits over the period when he knew his business was going under.

If there is any way of getting my money back, great, should I try the bank again? I have written the money off in reality but I am determined to wipe the smug smile off the director’s face, not just for me but for all the other people that are owed money.

What are the legal consequences of his actions and who should I report him to for maximum effect.

As I previously said, I am not an accountant so I’m not sure how to approach this 

Many thanks 

Mick

Replies (14)

Please login or register to join the discussion.

Routemaster image
By tom123
25th Dec 2018 07:43

Out of interest, how do you know the money was "paid into company B"?

Dormant accounts should not be produced if there are transactions during the year, so not seeing how this could have been done correctly.

Any money in company A is long gone, if it went under with such debts.

I suppose there are legal recourses, but of course they cost money to pursue.

It depends, really, whether there was wrongful trading, in that the directors took deposits when they knew the company was going to fail.

A business failing owing to poor trading conditions is not actually doing anything wrong - ie no tax evasion etc.

That may well not be the case here though.

Thanks (0)
Replying to tom123:
avatar
By mickyfromlutonuk
25th Dec 2018 10:55

Hi Tom

Merry Christmas to you and thanks very much for your response.
The reason I know that it went to company B is that my bank statement names them as the recipient, the name on the chip and pin machine also has the name of company B. Not even close in company name but the directors are all the same bunch of names.

The magistrate did suggest that we pursue the issue with another court case but how much do money do you throw at it? That’s why I would rather let the authorities sort him out, it’s just a case of how?
I would imagine he is well versed on playing the system at other people’s expense but as I have learned in life it’s the little things that eventually catch people out.

Thanks again for your response

Mick

Thanks (1)
By James Green
25th Dec 2018 22:25

A very frustrating situation, but no authorities will be interested as they do not have the resources to investigate and the costs involved for you of getting this to a place where you may tweak some statutory body’s interest will be very high.

I know this is not what you want to hear but it’s time to move on.

Have a good Christmas.

Thanks (0)
Replying to James Green:
avatar
By mickyfromlutonuk
25th Dec 2018 21:37

Hi James, probably very wise words, thank you .
Maybe I can make him sweat a bit if he thinks I will be reporting him.

Thanks again for your kind advice

Mick

Thanks (0)
Replying to mickyfromlutonuk:
Flag of the Soviet Union
By thevaliant
26th Dec 2018 21:35

I'm afraid not. 'He' won't be in the slightest bit worried because he's probably a serial offender at this and has learnt in the past that no one, and I do mean NO ONE, will do anything about this at all.

If he's on his fifth or sixth go around, then maybe, just maybe, someone somewhere will suggest they look into it.... but nawwh.... too much like hard work and Doctor Who is on the telly. So it'll get filed away for another couple of years....

Thanks (1)
By SteveHa
25th Dec 2018 14:21

You're too early. Legislation that was annouced in the 2018 budget, but not yet introduced, could potentially make the director(s) personally liable, but it isn't here yet.

Thanks (1)
By Moonbeam
26th Dec 2018 09:43

So sorry to hear about your issue. There are plenty of dodgy directors around unfortunately and at the moment plenty of retailers only just hanging on. I agree there's nothing really useful you can do except put it down to experience and remember never again to pay a deposit except by credit card.
Being angry can wreck your health. It will take a supreme effort, but try to move on, and you will feel happier if not wealthier.

Thanks (0)
Replying to Moonbeam:
avatar
By mickyfromlutonuk
26th Dec 2018 12:21

Hi moonbeam,

Thanks for the advice, I am past the making me ill stage, that was last year when we went to court.

I am resigned to not getting any money back also.
Short of waiting for him in a dark car park with a shovel I will try the bank again, I am wondering if they are in the knowledge of a payment into a dormant company weather they are duty bound to investigate it, I don’t know, it’s worth a try.
Failing that, I will tell him that I’m off to see the taxman and see how that goes too.

Thank you for your great advice

Mick

Thanks (0)
avatar
By lesley.barnes
26th Dec 2018 09:51

Have the liquidators concluded the case? If not could you contact them with proof that your contract was with Company A shown by the invoice but you were mislead and the money was paid into company B evidenced by your bank statement? That might prompt the liquidators to look further. If your money went into Company B and the chip and pin machine was set up to do this chances are other peoples money went there. If the liquidators find evidence of wrong doing he could be disqualified as a Director. You might also drop a note to https://www.gov.uk/government/organisations/hm-revenue-customs/contact/r.... If Company B is receiving income and claiming to be dormant it is evading tax. Chances are none of this will get you cash back but it might set your mind at rest you've done all you can without it costing you anything.

Thanks (1)
avatar
By legerman
26th Dec 2018 12:14

When you say voluntary liquidation, do you mean that the Directors appointed liquidators, or that they applied for strike off. If the former then Lesley Barnes has given some good advice, if the latter then I would look at taking the Directors to court personally on the grounds they have not acted in the best interests of the Company and as such are personally liable (tort, possible incorrect transfer of assets and falsely trading whilst declaring they are dormant all spring to mind)

At the very least a letter to HMRC Corporation tax is in order with proof that they weren't dormant when they said they were, because if money has gone through the new company and they haven't submitted a CT600 tax return they will be in deep doo dah.

Thanks (1)
avatar
By Maslins
27th Dec 2018 09:42

Unsure of the precise legalities, but if this is a serial offender, then perhaps a carefully written blog post/similar could help do some damage (won't get you your money back, but...).

Be very careful that it just states factually accurate information that you know for sure (with no speculation/personal opinion). However if you have fairly cast iron information of someone taking money, not delivering, closing company and restarting, then stating this should be ok. Use the individual's name, perhaps mentioning all other companies you can find that he has been/is still involved with.

It may not achieve much, but if done well, when people Google his name/company name and it ranks fairly highly, it could help stop future people making the same mistake.

I do agree with most other posters though, the legal system is an utter waste of space with this kind of thing. Only way you're going to have a chance of stopping him is by spending at least tens of thousands on legal fees. The crime isn't big enough for the police etc to care.

Thanks (1)
the sea otter
By memyself-eye
27th Dec 2018 09:56

What is (was) the name of company 'A' and from what area - you can do a lot of damage to 'newco' (company 'B') by using the facetwitter book and maybe even the good old BBC....

I've heard walking up and down outside their premises with a placard (suitably worded of course) also works.

Thanks (1)
avatar
By Justin Bryant
13th Jun 2019 13:26

This sounds like outright fraud to me. If the police aren't interested, write to the press.

Thanks (1)
Lisa Thomas
By Lisa Thomas - Insolvency Practitioner
02nd Jan 2019 10:05

I haven't read all the replies so apologies if repeating something but other than via a dividend in the Liquidation, your only chance of any recovery was from the Bank under s75 of the Consumer Credits Act but it seems you have tried that and have not got anywhere, which is a surprise.

Did you try to make the claim to the Bank pre Liquidation?

I would try again with the Bank now that the Company has been Liquidated.

Also, the Lqr has a duty to investigate the Directors conduct and the power to pursue them personally for any breaches under the Insolvency Act 1986.

They also report them to the Insolvency services who can fine, disqualify or jail Directors so worth putting your concerns to the Lqr if you haven't already.

Thanks (0)