Two directors of a newsagents have been disqualified for a combined 13 years for submitting false information to tax authorities.
Mohammed Arshid (61) and Maqsoodan Arshid (57) of Broughty Ferry, Dundee, have given undertakings to the Secretary of State for Business Innovation and Skills, that they won’t act as directors of a company for a period of 11 years and 2 years respectively, from 4 May 2016.
An investigation by the Insolvency Service found Mohammed Arshid had breached his fiduciary duty as a director by submitting false information to HM Revenue & Customs (HMRC) resulting in lost revenue on PAYE Tax, NIC, VAT and Corporation Tax totalling £1,020,423. His wife, Maqsoodan Arshid, was disqualified for abrogating her duties as a director which allowed Mohammed Arshid the freedom to commit the offence, which they both personally benefitted from.
Mohammed and Maqsoodan Arshid were both directors of Nethergate Newsagents Limited which was placed into compulsory liquidation on 17 July 2014, on the petition of HMRC with debts of £1,044,973.
The liquidation of Nethergate Newsagents took place after HMRC conducted a 5 year investigation during which established that Mohammed Arshid caused the company to under-declare and conceal liabilities:
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for 17 years, between tax years 1996/1997 and 2012/2013, he concealed liabilities owed to HMRC for PAYE Tax and NIC through submitting false P35 End of Year Returns resulting in lost revenue, inclusive of penalty charges, in the sum of £525,454.
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for a period of 64 VAT quarters between February 1997 and November 2102, he concealed liabilities owed to HMRC for VAT through concealing sales resulting in lost revenue, including penalty charges, in the sum of £170,182
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over three consecutive financial years between 30 November 2005 and 30 November 2007 he submitted incorrect company tax returns and in the following 6 years to 30 November 2013, he understated the company’s sales resulting in lost revenue, including penalty charges, in the sum of £221,282
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by their own admission, the cash misappropriations, from the company allowed Mohammed and Maqsoodan Arshid and their family members to achieve personal gain including home improvements, private education and topping-up of employee wages
Commenting on the disqualifications, Robert Clarke, Group Leader - Insolvent Investigations North, said:
"Directors who put their own personal financial interests above those of customers and creditors damage confidence in doing business and are corrosive to the health of the local economy.
These bans should serve as a warning to other directors tempted to help themselves first; you have a duty to your creditors and if you neglect this duty you could be investigated by the Insolvency Service and removed from the business environment."
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