11-year ban for payroll boss in tax avoidance scheme

Scott Ian Rooney, of Leicester, was appointed sole director of Magnetic Push Limited in February 2017 – a company providing payroll services – which sunk into liquidation after just 11 months.

It was after Mr Rooney refused to co-operate that an investigation was triggered by the Insolvency Service, which found that Magnetic Push was playing an active role as an umbrella company in a wider tax avoidance scheme.

The Mr Rooney declared a VAT liability of just £609 but the tax authorities claimed more than £4 million from Magnetic Push in the liquidation. The company also failed to declare PAYE and National Insurance contributions.

The absence of books and records meant investigators could not establish genuine company expenses from almost £37 million that had left the company account between February and December 2017, nor the reasons behind the company’s failure.

On 1 March 2021, at the High Court in front of Judge Jones, Mr Rooney was disqualified as a company director for 11 years.

Judge Jones increased Mr Rooney’s ban to 11 years after he ruled a longer ban was appropriate due to the seriousness of failing to keep records in the context of the large sums the company dealt with, almost £37 million in 11 months coupled with Mr Rooney’s lack of co-operation.

“Scott Rooney’s significant ban shows how important it is for company directors to keep adequate books and records, and the measures that can be taken if they do not take this responsibility seriously,” said Martyn Pettitt, deputy head of insolvent investigations at the Insolvency Service

“Directors like Scott Rooney cannot avoid scrutiny or sanctions when operating within a tax avoidance scheme by placing their company into insolvency and failing to co-operate and we will not hesitate to seek a ban where it is appropriate to do so.”