ADVANCE TECH (UK) LTD

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Disqualified Directors Conduct

Naseem ABID
May 1976
Disqualified from being a director because of their conduct for the period of
12 Years 0 Month(s)
Disqualification starts from
10 August 2020
Improper conduct which resulted in their disqualification
1. Between August 2016 and February 2017 (“the Period”), Naseem Abid (“Mr Abid”) breached his fiduciary duties to act in the best interests of Advance Tech (UK) Ltd (“Advance”) in that: a) Although not formally appointed with the Registrar of Companies, Mr Abid acted as a director of Advance during the Period; b) Advance received payments totalling at least £4,287,284 from members of the public for goods which it failed to supply; c) Advance put its customer’s monies at risk by paying suppliers in advance for goods without security and/or contracts in place, and failed to take sufficient steps to protect those payments. 2. Mr Abid caused or allowed Advance to participate in transactions, in relation to its 10/2016 and 01/2017 VAT periods, which were connected with the fraudulent evasion of VAT, such connections being something which Mr Abid either knew or should have known about. Mr Abid caused or allowed Advance wrongfully to claim VAT of £88,945 from HMRC in relation to the 10/2016 period, and £521,401 in relation to the 01/2017 period. Annex Mr Abid was aware or ought to have been aware of MTIC VAT fraud because prior to and during the transactions under consideration taking place: • He received education from HMRC officials on MTIC VAT fraud and the risks involved, from as far back as 2004 through his involvement in other businesses; • Advance received a letter from HMRC dated 04 November 2016 which contained advice on risks associated with MTIC VAT fraud, and procedures for validating VAT registration details of trading partners with HMRC. The letter also enclosed HMRC leaflet ‘how to spot missing trader fraud’, and also stated that Notice 726 – “Joint and several liability for unpaid VAT” was available on HMRC’s website. The trading in which Advance was involved had features which put, or should have put, Mr Abid on enquiry about the legitimacy thereof, as follows: • Advance’s supplier did not have the apparent means to engage in high value deals; • Advance’s supplier, rather than Advance, had control of the advertising, processing, control of stock, storage and shipment of goods to Advance’s customers; • Despite the value of the goods being purchased Advance did not enter into any formal written contracts with its supplier, and did not arrange any insurance cover in respect of any of the goods; • Advance made third party payments, a common feature in VAT supply chain fraud; • There was a clear distinction between Advance’s tax loss and non tax loss deals. In the tax loss deals, Advance’s supplier had complete control and the goods were sold to Advance’s customers on a website set up and controlled by the supplier. For the non tax loss deals Advance used its own website and two retail shops to transact goods with customers. Despite being aware of MTIC fraud and engaging in transactions bearing the features of such fraud, Mr Abid failed to ensure that Advance carried out effective steps, checks and / or due diligence in respect of its trade and of its trading partner as follows: • Advance failed to verify the VAT registration of its supplier with HMRC; • Advance was advised to undertake due diligence prior to undertaking transactions to establish the credibility and legitimacy of its supplier and supplies. HMRC denied Advance the right to deduct its input tax in transactions in the VAT periods ended 10/16 and 01/17. In view of the evident MTIC hallmarks and failure to take adequate steps to reduce risks of involvement with MTIC trading, HMRC denied Advance’s right to offset VAT of £792,822 in relation to the VAT periods ended 10/16 and 01/17.
Naseem Shahid
May 1973
Disqualified from being a director because of their conduct for the period of
12 Years 0 Month(s)
Disqualification starts from
10 August 2020
Improper conduct which resulted in their disqualification
1. Between August 2016 and February 2017 (“the Period”), Naseem Shahid (“Mr Shahid”) breached his fiduciary duties to act in the best interests of Advance Tech (UK) Ltd (“Advance”) in that: a) Although not formally appointed with the Registrar of Companies, Mr Shahid acted as a director of Advance during the Period; b) Advance received payments totalling at least £4,287,284 from members of the public for goods which it failed to supply; c) Advance put its customer’s monies at risk by paying suppliers in advance for goods without security and/or contracts in place, and failed to take sufficient steps to protect those payments. 2. Mr Shahid caused or allowed Advance to participate in transactions, in relation to its 10/2016 and 01/2017 VAT periods, which were connected with the fraudulent evasion of VAT, such connections being something which Mr Shahid either knew or should have known about. Mr Shahid caused or allowed Advance wrongfully to claim VAT of £88,945 from HMRC in relation to the 10/2016 period, and £521,401 in relation to the 01/2017 period. Annex Mr Shahid was aware or ought to have been aware of MTIC VAT fraud because prior to and during the transactions under consideration taking place: • He received education from HMRC officials on MTIC VAT fraud and the risks involved, from as far back as 2004 through his involvement in other businesses; • Advance received a letter from HMRC dated 04 November 2016 which contained advice on risks associated with MTIC VAT fraud, and procedures for validating VAT registration details of trading partners with HMRC. The letter also enclosed HMRC leaflet ‘how to spot missing trader fraud’, and also stated that Notice 726 – “Joint and several liability for unpaid VAT” was available on HMRC’s website. The trading in which Advance was involved had features which put, or should have put, Mr Shahid on enquiry about the legitimacy thereof, as follows: • Advance’s supplier did not have the apparent means to engage in high value deals; • Advance’s supplier, rather than Advance, had control of the advertising, processing, control of stock, storage and shipment of goods to Advance’s customers; • Despite the value of the goods being purchased Advance did not enter into any formal written contracts with its supplier, and did not arrange any insurance cover in respect of any of the goods; • Advance made third party payments, a common feature in VAT supply chain fraud; • There was a clear distinction between Advance’s tax loss and non tax loss deals. In the tax loss deals, Advance’s supplier had complete control and the goods were sold to Advance’s customers on a website set up and controlled by the supplier. For the non tax loss deals Advance used its own website and two retail shops to transact goods with customers. Despite being aware of MTIC fraud and engaging in transactions bearing the features of such fraud, Mr Shahid failed to ensure that Advance carried out effective steps, checks and / or due diligence in respect of its trade and of its trading partner as follows: • Advance failed to verify the VAT registration of its supplier with HMRC; • Advance was advised to undertake due diligence prior to undertaking transactions to establish the credibility and legitimacy of its supplier and supplies. HMRC denied Advance the right to deduct its input tax in transactions in the VAT periods ended 10/16 and 01/17. In view of the evident MTIC hallmarks and failure to take adequate steps to reduce risks of involvement with MTIC trading, HMRC denied Advance’s right to offset VAT of £792,822 in relation to the VAT periods ended 10/16 and 01/17.

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