The Royal Courts of Justice delivered its judgement for the case of Mr Patel, a director at Payless Cash & Carry Limited. The judgement recouped just over £3.5million in favour of the company's creditors for wrongfully claimed VAT on various liquor purchases. Mr Patel was found to be personally liable for causing the company to trade fraudulently and thereby breach his duty to the company.
Louise Brittain, liquidator and partner in Deloitte's Contentious Insolvency Group, said: "I am pleased to have brought the action and won such a high profile case. It shows the proactive stance HMRC and liquidators are taking to tackle tax evasion particularly in the alcohol trading arena, where the economy is estimated to lose hundreds of millions in lost revenue each year.
"This judgment serves as a warning to business owners who trade fraudulently that they may become personally liable for any debts they incur via corporate entities."
The main creditors in this case were HMRC, for assessments raised in relation to unpaid VAT. Moon Beever Solicitors acted for the Liquidator and Rupert Butler acted as Counsel to the Liquidator.
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