MR Mark RICHARDS

Disqualified from

2020-07-21

Date of birth on record

August 1975

Between 30 October 2017 and 14 March 2018 Mark Richards (“Mr Richards”) breached his fiduciary duties as a director of SRS Realisations Limited (“SRS”) and caused or allowed payments totalling at least £132,259 to be made to or on behalf of himself at a time when he knew, or ought to have known, that SRS was insolvent. The payments were to the detriment of HM Revenue and Customs (“HMRC”) who were owed at least £2,153,072 at Liquidation, in that: • On 26 July 2016, a firm of accountants (“the new accountants”) were appointed to assist SRS. At this time the directors were aware that the previous accountant had failed to submit VAT returns for SRS and that assessed amounts had been paid to HMRC for the period October 2013 to 30 June 2016; • On 22 September 2016, the new accountants wrote to the company informing the directors that VAT liabilities “remain very substantial in principal and this is a major threat to the solvency of the company”; • On 11 January 2017, HMRC sent a letter to SRS warning of winding-up action with an assessed amount due of £106,651.75. The new accountants advised to make an interim payment to HMRC and “That payment should exceed the amount demanded because we know that there is considerably more VAT due than the amounts estimated.” Despite this advice, on 26 January 2017 the company made payment of £106,651.75, the amount due as per the letter only. • On 19 May 2017, Insolvency Practitioners advising and acting for SRS spoke with HMRC about agreeing a time to pay agreement (“TTP”) or a Company Voluntary Arrangement (“CVA”). HMRC advised that a TTP was not an option and that a CVA would only be considered when outstanding returns were submitted; • On 23 May 2017, the new accountants provided Mr Richards with draft accounts for the years ending 30 April 2014, 2015 and 2016 which showed SRS to be balance sheet insolvent. The accounts to 30 April 2016 further show that although the company made a profit of £149,415, dividends in excess of that profit totalling £180,000 had been taken. The new accountants warned Mr Richards that the dividends were potentially considered illegal due to the insufficiency of distributable reserves; • On 07 June 2017, the new accountants sent draft VAT returns to Mr Richards for the period 01 May 2013 to 30 June 2016 which showed that SRS owed £718,512.27 to HMRC for VAT for that period. The draft returns were never sent by SRS to HMRC; • On 27 July 2017, HMRC attended at SRS premises and left a further letter warning of winding up action; • On 03 August 2017 the new accountants sent a further email stating that the VAT return for June required paying to keep up with the current liability for VAT. The amount due was £106,146.13. No payment was made to HMRC for this period; • On 25 August 2017 a further set of accountants were employed by SRS to review the previous accounts already filed and bring SRS accounts up to date; • On 05 December 2017, SRS engaged an Insolvency Practitioner where after a review, the directors were told that SRS was insolvent and should enter into a CVA; • On 06 February 2018, HMRC submitted a petition to court for the winding up of SRS; • On 14 February 2018, SRS proposed a CVA to creditors. On 15 February 2018, HMRC sent a fax to the proposed supervisor rejecting the CVA due to the failure to submit VAT returns. The letter stated it was a compliance rejection and would not be reviewed again. The CVA was formally rejected at the meeting of creditors on 06 March 2018; • Between 01 January 2018 and 09 March 2018, SRS made payments to or on behalf of Mr Richards totalling £151,259. In the same period, Mr Richards credited SRS with £19,000 leaving net receipts from SRS of £132,259; • On 14 March 2018, SRS was placed into Administration; • At the date of Administration on 14 March 2018 HMRC were owed £2,089,301 and trade and expense creditors were owed £2,351.