Fooling Companies House and HMRC

[Concerned]

A friend of mine started up a Ltd company abut 9 years ago and after 12 months filed a confirmation statement but no annual return, 6 months later extended accounting period so at 2 years on still no return then 6 months later First Gazette notice for compulsory strike off followed by Final Gazette dissolved via compulsory strike-off the following year, nearly 4 years trading with a VAT registration number so I assume VAT must have been up to date, he didn't file a single annual return.

One month after strike off he started a new company using exactly the same name but obviously a different company number showing at Companies House and then immediately extended the accounting period by 6 months. When it got to the 18 month point he changed directors details by shortening his first name and adding his middle name, looking at the records this seemed to buy him another 12 months. Then First Gazette notice for compulsory strike appeared, 7 days later he changed registered office and after another 12 days Compulsory strike-off action has been discontinued was showing. Since then, like clockwork, it has gone -First Gazette notice for compulsory strike off followed by confirmation statement followed by Compulsory strike-off action has been discontinued, 3 times now! This company is now 27 months overdue for accounts and will probably just get struck off again.

In the mean time he has set up two more companies with very similar names then formed a Group Ltd company, using the same first name and taken the other 2 onboard, is using the same tactics, and has stood down as the person with significant control but named the 'Group Ltd' as such.

He assures me everything is fine and there is nothing to worry about, he knows what he is doing, he has a system! It must work as he lives a very extravagant and good life.

Over 9 years trading as Ltd companies with a big turnover but never once filing an annual return.

Does anyone know how this system works, is it possible to fool Companies House and HMRC and get away with it?

I have followed lots of businesses for many years but have never seen anything like this before.

 

[Paul Kelly ICHYB]

If you are concerned, report him to HMRC!!!

 

[Newchodge]

A friend of mine started up a Ltd company abut 9 years ago and after 12 months filed a confirmation statement but no annual return, 6 months later extended accounting period so at 2 years on still no return then 6 months later First Gazette notice for compulsory strike off followed by Final Gazette dissolved via compulsory strike-off the following year, nearly 4 years trading with a VAT registration number so I assume VAT must have been up to date, he didn't file a single annual return.

One month after strike off he started a new company using exactly the same name but obviously a different company number showing at Companies House and then immediately extended the accounting period by 6 months. When it got to the 18 month point he changed directors details by shortening his first name and adding his middle name, looking at the records this seemed to buy him another 12 months. Then First Gazette notice for compulsory strike appeared, 7 days later he changed registered office and after another 12 days Compulsory strike-off action has been discontinued was showing. Since then, like clockwork, it has gone -First Gazette notice for compulsory strike off followed by confirmation statement followed by Compulsory strike-off action has been discontinued, 3 times now! This company is now 27 months overdue for accounts and will probably just get struck off again.

In the mean time he has set up two more companies with very similar names then formed a Group Ltd company, using the same first name and taken the other 2 onboard, is using the same tactics, and has stood down as the person with significant control but named the 'Group Ltd' as such.

He assures me everything is fine and there is nothing to worry about, he knows what he is doing, he has a system! It must work as he lives a very extravagant and good life.

Over 9 years trading as Ltd companies with a big turnover but never once filing an annual return.

Does anyone know how this system works, is it possible to fool Companies House and HMRC and get away with it?

I have followed lots of businesses for many years but have never seen anything like this before.

The system works by fraud. Report him to HMRC.

 

[ChrisCallaghan]

As of Dec 2021, The Insolvency Service have been granted powers to investigate the actions of directors of dissolved companies, largely because of the types of activities you have described. They may catch up with him eventually, especially if he took a BBL in any of his companies.

As others have suggested, you could report him to HMRC, but you could also report your concerns to the Insolvency Service: https://www.gov.uk/government/publi...olvency-service#reporting-a-dissolved-company

 

[Concerned]

If you are concerned, report him to HMRC!!!

The system works by fraud. Report him to HMRC.

I'm just concerned for him and was hoping he hasn't got himself in too deep, as I said he is a friend so I wouldn't be reporting him.

Would you say this is a common practice amongst some people, I understand when you say it is fraud but is it known by any particular name in the 'trade' ?

 

[fisicx]

I'm just concerned for him and was hoping he hasn't got himself in too deep, as I said he is a friend so I wouldn't be reporting him.

Which makes you an accessory to the fraud. I wouldn't want them as a friend.

 

[UK Contractor Accountant]

understand when you say it is fraud but is it known by any particular name in the 'trade' ?

yes the "spongebob" plan

 

[UK Contractor Accountant]

He assures me everything is fine and there is nothing to worry about, he knows what he is doing, he has a system! It must work as he lives a very extravagant and good life.

yes because he doesnt pay any tax - bet he doesn't declare the full amount of income he takes from the company either.

 

[Paul Kelly ICHYB]

Would you say this is a common practice amongst some people

No. It is avoiding paying tax, something that pays for our public services - people like this deserve everything that is coming to them.

 

[ChrisCallaghan]

I'm just concerned for him and was hoping he hasn't got himself in too deep

I agree with others who've commented. You are worried about a friend who has knowingly and wilfully committed tax evasion, a form of a fraud, which is an offence. Is he in too deep? Yes, but the horse has bolted. If HMRC and/or The Insolvency Service catch up with him, then any outcome will be of his own making.

Forgive me if my sympathies are low. Today I have spoken with 4 separate new potential clients, all company owners who have done everything in the power to run their companies above board, and are heartbroken about the potential closure of their companies as a result of the ongoing cost of living crisis..,.. whilst your friend manipulates the system for his personal benefit.

 

[japancool]

So... "asking for a friend", eh?

 

[DontAsk]

he is a friend so I wouldn't be reporting him.

You are an accessory to his fraud in that case. Do the right thing.

 

[Concerned]

So... "asking for a friend", eh?

about a friend!

 

[UK Contractor Accountant]

Crackdown on directors who dissolve companies to evade debts

Rogue directors who dissolve their companies and avoid paying liabilities to staff, creditors and the taxpayer can now be disqualified from being a director.

www.gov.uk

 

[UK Contractor Accountant]

This Act extends those investigatory powers to directors of dissolved companies and if misconduct is found, directors can face sanctions including being disqualified as a company director for up to 15 years or, in the most serious of cases, prosecution.

The Business Secretary will also be able to apply to the court for an order to require a former director of a dissolved company, who has been disqualified, to pay compensation to creditors who have lost out due to their fraudulent behaviour.

 

[Concerned]

This Act extends those investigatory powers to directors of dissolved companies and if misconduct is found, directors can face sanctions including being disqualified as a company director for up to 15 years or, in the most serious of cases, prosecution.

The Business Secretary will also be able to apply to the court for an order to require a former director of a dissolved company, who has been disqualified, to pay compensation to creditors who have lost out due to their fraudulent behaviour.

That is a real eye opener, I almost wish I hadn't asked about this now, I would of been better off not knowing!

 

[fisicx]

That is a real eye opener, I almost wish I hadn't asked about this now, I would of been better off not knowing!

Cease your friendship and report them. They are criminals.

 

[IanSuth]

This Act extends those investigatory powers to directors of dissolved companies and if misconduct is found, directors can face sanctions including being disqualified as a company director for up to 15 years or, in the most serious of cases, prosecution.

The Business Secretary will also be able to apply to the court for an order to require a former director of a dissolved company, who has been disqualified, to pay compensation to creditors who have lost out due to their fraudulent behaviour.

My only worry about that is that it turns into another tool they have but never use - or use on the easy cases and not on the biggest fraudsters as it is too hard

 

[Concerned]

I wonder why Companies House/HMRC haven't got a system set up to spot this kind of behavior?

This can't be a one off if it's so easy to operate in such a manner.