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Restaurateur banned for 9 years after concealing tax owed to HMRC

The restaurateur behind Glasgow-based Cyan Restaurant has been disqualified for nine years after he concealed over £130,000 in tax from HMRC.

Restaurateur banned for 9 years after concealing tax owed to HMRC
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David Cowan, Glasgow-based director of Avenbrae Limited, the company behind Cyan Restaurant, has been disqualified for nine years for concealing VAT. 

"David Cowan failed to observe his statutory duties as a company director to comply with VAT obligations, and his business gained a competitive advantage as a result, which is unacceptable behaviour," said Robert Clarke, chief investigator for the Insolvency Service.

The bar and bistro began trading outside Glasgow, in August 2014. However, Mr Cowan did not register the company for VAT until a year later, in August 2015.

Mr Cowan then failed to ensure the company filed quarterly VAT returns, which caused HMRC to raise assessments on the company’s behalf, which were only partially paid.

In June 2017, an HMRC investigation uncovered that the company had been concealing VAT since August 2014, and a few months later they requested immediate payment of the outstanding amount.

At the same time, several new restaurants and a hotel in the area negatively impacted footfall to Cyan and, by January 2018, Mr Cowan had placed Avenbrae Limited into creditors' voluntary liquidation.

At the point of liquidation, the company owed HMRC £195,000 in VAT, which included fines for unpaid tax and VAT due for the final quarter of trading. In addition, the company owed other creditors almost £23,000.

"Any other directors who behave in this way should expect an Insolvency Service investigation and a lengthy ban," said Mr Clarke. 

In August this year, the Secretary of State accepted a disqualification undertaking from David Cowan for nine years. Effective from 28 August 2019, he is banned from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.

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