Lancashire brothers banned over unpaid VAT bill

TWO Lancashire brothers who ran a property development business have been banned from holding company directorships for eight years each after failing to pay VAT of £1.3m.

Asif Ibrahim Bux and Firoz Ibrahim Bux, were directors of Preston property development firm Goldace Estates from 2003 until it went into administration in 2011.

The disqualifications, which started on 13 September 2013, follow an investigation by the Insolvency Service.

Asif Ibrahim Bux, previously known as Asif Ibrahim Patel and Firoz Ibrahim Bux, previously known Firoz Ibrahim Patel both gave undertakings to the Department for Business that they will not control or manage a company for eight years each until September 2021.

Following the investigation, the Bux brothers did not dispute that under their control, Goldace Estates sold a commercial property in Preston in December 2007 for £8.78m and £1,3m 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 brothers could not account for the VAT they collected, and therefore could not pay it to HMRC.

At the time it went into liquidation in March 2012, Goldace owed £2,86m to creditors. Of this, £1,7m was owed to HMRC which included the £1,308,125 VAT, penalties and interest.

The Insolvency Service said there is an additional contingent claim from HMRC for £1,45m 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.”

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