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Liquidation turned Investigation – Companies Caught Out Whilst Closing…

VAT Fraud Investigation

Liquidation turned Investigation – Companies Caught Out Whilst Closing…

Setting up a limited company is a relatively easy process; it can be done within a couple of hours and not too much hassle. Closing one down on the other hand? That’s a bit trickier…

Liquidation is the process of bringing a business to an end and distributing its assets to its claimants. There are a variety of ways to liquidate your company and one key rule – it must be done by a licensed Insolvency Practitioner (IP) – liquidator. The liquidator is responsible for taking control of the company and distributing funds in order to repay as many creditors as possible. Only after creditors have been paid can any remaining assets be distributed to shareholders. 

So why are liquidations so detailed? During liquidation, the IP will investigate the director’s conduct as well as the company books and records. This means that if the company is being closed in order to cover up tax avoidance or fraud, it will be discovered. In simple terms, you can’t just take a load of money out of a failing company and then close it to hide the evidence. 

What about if you ignored all that and just did it anyway? 

We can tell you now, it probably won’t end well… 

A director of a Leicester payroll service was sentenced to an 11-year director disqualification after his company was discovered to be part of a tax avoidance scheme. The company operated for only 11 months before it was voluntarily wound-up, when the problems became apparent. The director refused to co-operate with the liquidator and denied access to company records. This meant that investigators were unable to tell what proportion of the £37m that had left the business bank account was for genuine company expenses. Put simply; the director was spending approximately £3.3m per month on “business expenses” through the company account but refused to reveal on what the money had been spent. 

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What to expect from our team...

  • HMRCPenalty Appeals & Tax Hearings

  • HMRC Tax Investigations

  • VAT Specialist Advice & Investigation

  • Contractual Disclosures

  • Offshore Disclosures

  • Voluntary Disclosures

Here to help, not to judge
Tax Specialist


Partner Nicola has a wealth of experience in dealing with all types of Indirect Tax Investigations (VAT).
Nicola has been VAT Inspector for over 20 years at HM Customs now HM Revenue & Customs. She was a Higher Officer for more than 10 years.
Her duties included carrying out vat inspections of all types and size of businesses dealing with technical issues to detecting evasion. Nicola recently joined MS Taxes as head of Indirect Tax Investigation.

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Tax Investigation Specialist
Tofail,Founding Partner and Tax Investigation Specialist


Founding Partner

Tofail is a qualified Chartered Accountant with over 15 years of experience in accountancy and taxation.
He has worked alongside a former Inspector of Taxes gaining invaluable insights of inner HMRC workings, which he utilises to support clients through tax challenges and steer clear from possible investigations.
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Tax Specialist
Tim,Founding Partner


Founding Partner

Tim has a wealth of experience dealing with all types of International Payroll Tax and IR35 Tax Investigations.
Tim has worked within Financial Services and Accounting since 2001 including working with HMRC on VAT investigations.
He is a specialist in International Taxation Experience, International PEO Employment Solutions as well as in providing solutions for contractors and limited companies.

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Worldwide Disclosure Expert



Andrew began his career in HM Customs & Excise and subsequently moved to HMRC (then called the Inland Revenue) on appointment as one of HM Inspector of Taxes.
completing his training he was sent as District Inspector in charge of West Midlands and was soon transferred to Head Office as a fraud investigator in Enquiry Branch (now Fraud Investigation Services) where he spent eight years conducting Code of Practice 9 investigations on a wide variety of individuals, partnerships and companies.

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