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Restaurateur banned for food safety breaches and underpaying tax

17 May 2016 by
Restaurateur banned for food safety breaches and underpaying tax

A London restaurateur has been banned from managing a limited company for six years for unpaid taxes and repeated breaches of food and hygiene regulations.

Sonargaon Indian Cuisine Limited went into liquidation on 24 April 2014 owing £303,132 to creditors. More than half was owed to HMRC in respect of underpaid PAYE/NIC and associated fines.

Mohammed Koysor Ahmed, the company's director, admitted failing to ensure proper tax accounts in respect of employee tax and national insurance contributions.

Following an unannounced visit to its trading premises on 10 September 2013, HMRC determined that Sonargaon had failed to report accurately regarding employee wages and deductions.

HMRC advised Sonargaon that it calculated PAYE and National Insurance Contributions totaling £15,467.97 had been under-declared for the 2008/09 tax year, £19,705.18 for 2009/10, £20,730.97 for 2010/11, £22,426.88 for 2011/12 and £23,074.49 for 2012/13.

Amongst Sonargaon records, including bank statements, there was no evidence of wage payments to employees, no timesheets and no other documents from those periods to support Sonargaon's returns, said HMRC.

Ahmed was also found to have failed to ensure the firm complied with food and hygiene regulations on two occasions. Food hygiene officers found Sonargaon had contravened six regulations, putting customers at risk of food poisoning, in October 2011. Ahmed pled guilty and was fined £3,655.

A second visit in May 2012 found a further five contraventions of the same regulations. Sonargaon was found guilty and fined £30,000 plus costs of £3,315. Only £1,750 was paid towards the fines. HM Courts service submitted a claim in the liquidation of £35,220 for the remaining amount.

Mark Bruce, chief examiner for Insolvent Investigations South at the Insolvency Service, said:

"This director sought an unfair advantage over competitors by not declaring accurately its liabilities due to HMRC and by cutting corners with its hygiene and food safety practices.

"The Insolvency Service rigorously investigates directors who breach legislation, particularly where customers' health is put at risk, and this ban should act as a warning to other employers who are flouting the law."

He added: "Directors who also seek to obtain commercial advantage over their competitors show a total disregard for the business community generally."

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