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The Mystery of the Missing Company

The Mystery of the Missing Company

28 July 2016: Alan Limb, an Insolvency Practitioner from BRI’s Southampton office, tells the story of company where not everything was as it seemed.

We were recently contacted by HMRC and asked to take the appointment as Liquidators of a company that had been wound up for unpaid Corporation Tax. The company had filed all documents at Companies House on time since incorporation 5 years previously. Its accounts depicted a profitable trading history throughout as a wholesaler of building products with the latest figures showing:

  • Turnover of £4.9m
  • Net profit of £900k
  • Net assets of £2.2m

The accounts were flagged up for attention by HMRC when filed because the company had never been registered for any form of tax. Assessments for Corporation Tax were raised on the company which went unpaid and resulted in the winding up.

Having been approached by HMRC we investigated the background to the company to help us decide whether to accept the appointment. We learned the following:

  • The company had been registered at 3 different addresses since incorporation, none of which existed because they were incomplete.
  • The company’s only Director could not be traced on the internet other than in connection with that role. Again, he was registered at an incomplete address.
  • We could find no evidence that the company had ever existed, other than on paper at Companies House

Consequently we agreed with HMRC that there would be no benefit to them in us accepting the appointment as the both the company and its accounts appeared to be fictitious. We concluded that the company was created for the purpose of obtaining goods on credit and defrauding suppliers but we were unable to find any evidence of that actually happening in this case.

If you or your clients are facing financial difficulties as a result of not being paid by a customer for whatever reason then please contact a member of the experienced BRI management team at one of our offices for free, confidential, no obligation and independent advice.