MR SHRAYASH PATEL

Disqualified from

2020-10-07

Date of birth on record

August 1985

Between 07 May 2015 and 31 January 2018 Shrayash Patel (“Mr Patel”) caused Funky Brownz 2 Ltd (“FB2L”) to trade to the detriment of HM Revenue & Customs (“HMRC”) in respect of Value Added Tax (“VAT”) from 07 May 2015 and Pay as you Earn tax and National Insurance (“PAYE/ NIC”) from 25 November 2015 in that: VAT • On 08 June 2015 FB2L filed a VAT return for quarter ending 03/15 showing that £19,589 was due for payment by no later than 07 May 2015. The late filing of the return incurred an additional surcharge of £2,938 bringing the total due for this quarter to £22,527. Between 01 September 2015 and 15 January 2016 FB2L made payments totalling £19,527 against this liability under a Time to Pay arrangement, which was later cancelled due to non-payment of current liabilities. No further payments were made against this liability resulting in an outstanding balance at Liquidation of £3,000. • A further 10 VAT returns for quarters 06/15 through to 09/17 were filed showing that VAT totalling £178,193 was due plus surcharges of £26,729. An assessment in the amount of £19,534 plus a surcharge of £2,930 was also raised by HMRC for the quarter 12/17 in lieu of a filed return, together with an assessment on Liquidation of FB2L in the amount of £6,310. FB2L made no payments against these ongoing liabilities resulting in an outstanding balance of £233,696 at Liquidation. • On 21 September 2015, following an inspection of FB2L’s records by HMRC on 10 April 2015, HMRC raised an Officer’s Assessment in the total amount of £21,039 plus interest of £952 in respect of VAT under-declared each quarter between 09/11 and 12/14, with the exception of VAT quarter 06/13. Civil Penalties were also raised in the amount of £9,567 bringing the total amount payable to £31,558. No payments were made against the Officer’s Assessment and related Civil Penalties, resulting in the full amount of £31,558 remaining outstanding at Liquidation. • Including interest of £1,423, total liabilities of £269,676 were outstanding in respect of VAT and related surcharges at Liquidation on 31 January 2018. PAYE/NIC • For tax year 2015/16 FB2L filed monthly RTI returns showing the company had a combined PAYE/NIC liability of £7,880 which fell due for payment by 22 May 2016 at the latest. According to HMRC FB2L made payments totalling £5,169 against the liability, leaving £2,711 outstanding at the date of Liquidation on 31 January 2018, plus late filing penalties of £800 and interest of £34. • On 25 November 2015, following an Employer Compliance enquiry and an inspection of FB2L’s records by HMRC on 11 June 2015, at which Mr Patel was present despite having formally resigned his directorship two weeks earlier, FB2L was issued with a Decision Letter enclosing Notices of Regulation 80 Determinations in respect of PAYE taxes and Notices of Decision in respect of NI contributions for tax years 2011/12, 2012/13, 2013/14 and 2014/15. The combined Determinations for these years totalled £523,178 and fell due for payment within 30 days of the Notice (by 25 December 2015). At Liquidation at least £493,638 of this combined total remained unpaid. • On 09 March 2016 a final Notice of Penalty Assessment in the amount of £292,467 was also issued by HMRC in respect of the Regulation 80 Determinations, which became payable within 30 days of the Notice (by 08 April 2016). No appeal was filed within the 30 days permitted and FB2L made no payments against the penalty. The full penalty amount remained outstanding at the date of Liquidation. • For tax year 2016/17 FB2L filed monthly RTI returns showing the company had a combined PAYE/NIC liability of £16,970 which fell due for payment by 22 May 2017 at the very latest. According to HMRC an Employment Allowance of £3,000 was allocated against the liability reducing the amount due to £13,970. FB2L made no payments against this liability leaving the full amount of £13,970 outstanding at the date of Liquidation, plus late filing penalties of £1,600 and interest of £55. • Including historical interest of £211 from tax years 2013/14 and 2014/15, total liabilities of £805,486 were outstanding in respect of PAYE/NIC at Liquidation on 31 January 2018. Comparable treatment • As at the date of Liquidation HMRC’s total claim is at least £1,082,761. No VAT or PAYE/NIC liabilities were recorded in the professionally prepared accounts for the year ended 28 February 2016. According to those same accounts, comparative figures show that as at 28 February 2016 ‘other creditors’ were owed £212,976 compared to £273,759 for the previous year; a reduction of £60,783. At Liquidation, excluding a possible shortfall against a secured creditor, other creditors were £133,541. • Bank analysis shows that between 03 January 2017 and Liquidation on 31 January 2018 no payments were made to HMRC. During the same period net payments of at least £58,080 were made to a former director, of which approximately £12,750 related to a verbal settlement agreement in respect of wages upon their exit from FB2L, and a total of £358,000 was paid to an associated company in respect of rent for the trading premises.