WIREDGOV

Claire Fraser (32) was the sole director of CAF (Scotland) Ltd, which had a registered office of 15-17 Bruce Street, Dunfermline, Fife, KY12 7AG. The company was incorporated on 26 July 2012 and began trading in around August 2012. The company operated 4 bars in the Dunfermline and Kirkcaldy area, named Life (Kirkgate, Dunfermline), Fabric (Canmore Street, Dunfermline), Café D (Bruce Street, Dunfermline) and Café K (Hill Place, Kirkcaldy). The company ceased trading in around early 2014 and went into liquidation on 13 August 2014 with an estimated deficiency to its creditors of £186,732.

The Insolvency Service investigation calculated that the failure of CAF (Scotland) Ltd to pay its business rates left a total liability to Fife Council of £130,746. Furthermore, CAF (Scotland) Ltd made no Pay As You Earn (PAYE) and National Insurance (NIC) payments to HMRC, resulting in a liability of £25,985.

CAF (Scotland) Limited first fell into arrears with its business rates obligations on 16 March 2013. Since that date, the company made payments totalling at least £175,578 to other parties, including its landlord, trade suppliers and other creditors, whilst making no payments to Fife Council or to HMRC for taxes due.

The investigation by The Insolvency Service also found that Claire Fraser failed to provide the accounting records for CAF (Scotland) Ltd to the Liquidator as required by law.

Without these records it has not been possible to explain:

• the purpose of payments totalling £186,127 that were paid out from the company’s bank account

• what cash sales were generated by the 4 bars operated by the company

• what other debts may have been left owing by the company - including to HMRC for Value Added Tax

• what wages and benefits were taken by Claire Fraser

• the exact dates that CAF (Scotland) Ltd commenced and ceased trading

Robert Clarke, Head of Company Investigation at the Insolvency Service said:

Company directors have a duty to ensure businesses meet their legal obligations, including paying taxes and preserving accounting records.

Deliberate neglect of tax affairs is not a victimless action, as it deprives the taxpayer of the funds needed to operate public services and allows companies to gain an unfair advantage over other businesses who are doing the right thing and paying the money they owe.

Furthermore, directors who operate cash based businesses have to maintain sufficient records to explain where these monies have gone and following insolvency, make sure that such records are delivered up for scrutiny by the relevant bodies. By failing to do this the public can not be sure that all funds received by the company were used for legitimate purposes.

The Insolvency Service will take action against directors who do not take their obligations seriously and abuse their position of trust.

Notes to editors

Claire Fraser’s date of birth is 22 September 1983.

Claire Fraser was appointed as director of CAF (Scotland) Ltd on 26 July 2012 and remained a director throughout the company’s trading.

The Secretary Of State accepted a disqualification undertaking from Claire Fraser on 31 March 2016. The disqualification commences on 21 April 2016 and is effective until 21 April 2022.

A disqualification order has the effect that without specific permission of a court, a person with a disqualification cannot:

• act as a director of a company

• take part, directly or indirectly, in the promotion, formation or management of a company or limited liability partnership

• be a receiver of a company’s property

In addition that person cannot act as an insolvency practitioner and there are many other restrictions are placed on disqualified directors by other regulations.

Disqualification undertakings are the administrative equivalent of a disqualification order but do not involve court proceedings. Further information on director disqualifications and restrictions is available.

The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. It may also use powers under the Companies Act 1985 to conduct confidential fact-finding investigations into the activities of live limited companies in the UK. In addition, the agency authorises and regulates the insolvency profession, deals with disqualification of directors in corporate failures, assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees, provides banking and investment services for bankruptcy and liquidation estate funds and advises ministers and other government departments on insolvency law and practice.

Further information about the work of the Insolvency Service, and how to complain about financial misconduct, is available.