An electrician in Surrey has been banned from running a company for 7 years after he failed to explain nearly £1m of company account expenses
Marcin Jarnot was director of electrical contracting company, GJES London Ltd. The company traded for over 7 years until it went into creditors voluntary liquidation in April 2019 due to its inability to pay its debts.
GJES London’s insolvency triggered an investigation by the Insolvency Service into Grzegorz Jarnot’s conduct as a director.
Investigators discovered that from November 2017 to April 2019 more than £952,000 had been paid into GJES London’s bank account, with almost £958,000 paid out.
Grzegorz Jarnot, however, failed to provide any accounting records to prove whether the bank deposits accounted for all GJES London’s income and whether the payments made out were legitimate expenditure.
Further investigations found that GJES London was trading to the detriment of the tax authorities, having failed to pay all its VAT, PAYE and National Insurance and corporation tax from 2016 to 2019.
Investigators established that 18 months before GJES London became insolvent, the company’s accounts declared that GJES London owed the tax authorities £39,500.
However, £810,000 was paid out from GJES London’s company bank account in the last 15 months and no tax was paid.
The tax authorities have claimed more than £255,000 in the liquidation.
On 21 December, the Secretary of State accepted an undertaking from Grzegorz Jarnot after he did not dispute that he failed to ensure GJES London Ltd maintained adequate accounting records and the tax authorities had been treated unfairly during the period of trading.
‘Unacceptable’ director conduct
Lawrence Zussman, deputy director of Insolvent Investigations, said: “Grzegorz Jarnot’s conduct as a director was unacceptable. Records show that close to £1m was deposited into and paid out from the company bank account.
“But Grzegorz Jarnot failed to explain the source of the funds, who payments were made to and whether it was legitimate business spending. He also failed to ensure the company paid its tax obligations.
“Maintaining and keeping company records is a statutory requirement for all directors and Grzegorz Jarnot’s seven-year ban means he has been removed from the business environment for a substantial amount of time.”
Grzegorz Jarnot’s disqualification is effective from 11 January and he is banned from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company for 7 years.