Article provided courtesy of The insolvency Service
Trader of electronic goods retained no records, leaving tax bill of more than £2.7 million unpaid and no explanation for transactions totalling nearly £5 million.
Colin Hulme, 44, from Stoke-on-Trent, was sentenced to 12 months imprisonment, suspended for 24 months, at Stoke Crown Court on 4 August 2023, after failing to keep accounting records for his business. He will also have to undertake 150 hours of unpaid work in addition to his sentence, and pay £5,000 towards prosecution costs.
Hulme was sole director of KDM & Sons Ltd, which bought and sold PlayStations, mobile phones and computer hard drives, from April 2016 until the company went into liquidation in 2017.
However, following the company’s closure, Hulme failed to deliver up sufficient company records to either the liquidator or the Insolvency Service to establish why the business had failed, or even when it had ceased trading.
Hulme had previously claimed that he had handed over three boxes of books and records to the liquidator’s offices in Sutton Coldfield, yet there was no record of this delivery.
Julie Barnes, Chief Investigator at the Insolvency Service, said:
Any business owner should ensure they have proper financial record keeping in place, but for directors of limited companies this is a specific legal requirement.
There are no excuses and as Colin Hulme has discovered, a failure to do so can and will result in a criminal conviction.
Without the necessary invoices or cash book, neither the liquidator nor the Insolvency Service investigators were able to determine whether deposits of approximately £2,218,300 into the company’s bank account between June 2016 and June 2017 were from genuine sales of electronic equipment, nor whether outgoings of around £2,236,800 from the same account were legitimate business expenditure.
At the end of November 2016, the company owed £2,776,209 in tax. This amount was never paid, and the court heard that investigators were not able to establish whether the tax assessment should in fact have been higher. Nor could the accuracy of the company’s Statement of Affairs, submitted to Companies House, be verified, so investigators were unable to determine whether the company had any recoverable assets to pay back creditors.
Hulme had earlier accepted a disqualification undertaking from the Secretary of State in August 2019, but was later charged with a breach of the Companies Act 2006 due to the criminal nature of his misconduct. He was sentenced by Recorder Macadam.