When show-business goes bad
They move from one gilded success to another without any downturn in between. Even notoriously hard careers such as running their own business comes easily to them as the profits and plaudits perpetually roll in. Except when they don’t.
The law applies to celebrities as much as it does to “civilian” directors as it turns out being a celebrity does not give you a golden ticket to business success – no matter how much of a winner you are.
Take David Weir, better known as the Weirwolf. He’s one of Britain’s most decorated paralympians with eight London Marathon wins and six gold medals to his name with his sights set on adding to his collection in the Tokyo games next year.
Training to paralympic standard leaves little room for anything else including meeting tax deadlines as he found to his cost this year when he was disqualified from being a company director for four years after failing to pay nearly £50,000 in overdue taxes. He’s unable to act as a UK company director now until 2023 at the earliest.
He put his company, David Weir Limited, into liquidation in 2017 but further investigations by The Insolvency Service discovered that while he had received more than £400,000 from the company during its five years of trading, it had only paid £30,000 in corporation tax, owning an additional £49,469 to HMRC.
The Insolvency Service said: “Mr Weir failed to ensure that David Weir Limited met it’s financial commitments as regards to corporation tax and S455 tax and caused the company to continue trading whilst withdrawing funds for the benefit of himself. As a result the company became unable to meet its financial commitments to HMRC.”
The Price is Right
Other celebrities try to diversify their business interests into different product ranges based on their fame and personality.
Katie Price is a ubiquitous celebrity presence with many ventures including TV shows and appearances, clothing lines and fragrances.
The Insolvency Service thought something smelled funny with her company KDC Trading Limited which hadn’t filed any accounts since 2017. Despite a warning that the firm would be dissolved if no accounts were forthcoming, the deadline passed in June this year and the firm will be broken up as a consequence.
The company sold equestrian and clothing lines and the last filed accounts for April 2017 showed a deficit of £22,000. Katie Price also entered into an Individual Voluntary Arrangement (IVA) last year to avoid personal bankruptcy and give her the chance to pay off some of her personal debts.
Liquidators are already going through the process of breaking up another Price owned company – Jordan Trading Ltd – which is the subject of a liquidators report to The Insolvency Service.
Chris Horner, Insolvency Director of Business Rescue Expert, explains further: “When we work with an insolvent company, we have to submit a report on the conduct of each director of that company to The Insolvency Service.
“Most of the time there’s nothing untoward to report and everybody has done their best to keep the company going. Sometimes though, we do find misconduct and we have to investigate the extent of it to determine if the director involved is unfit to manage companies in the future.
“Misconduct covers many things including:-
- Defrauding creditors
- Taking unwarranted risks with creditors’ money
- Misappropriation of company assets or money
- Failing to pay debts or cover losses
- Taking out loans for no company benefit
- Taking excessive money from the business for themselves
“The Insolvency Service considers the report along with any other information or previous reports and will investigate further if necessary. They’d then look to go to court to enforce disqualification if the defendant does not accept a voluntary disqualification undertaking.
“A voluntary undertaking would usually be more lenient than a court ordered disqualification regarding the length of the ban. The minimum disqualification period is two years but it can be up to 15 depending on the seriousness of the offences.
“If a person acts as a director while banned then they’re committing a criminal offence and can be held personally liable for all the debts of the company they’re managing.”
The majority of clients we work with have been diligent with no blame attached as they executed their lawful duties to help keep their businesses alive.
If you’re done everything you can and you need some help or if you’re anxious about the investigation process then contact us today.
One of our expert advisors will set up a convenient and free initial consultation with you to discuss every aspect of the insolvency procedure including any possible likely investigations.