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Case Profile

- Company in liquidation, amount owed to creditors - circa £730,000, with a floating charge on assets (crystallised into a fixed charge) and a personal guarantee by the director on one of the loans. This case subsequently involved a novation between the relevant parties. There was a considerable amount of assets involved. - Bankruptcy – the unpledged assets in the bankrupt’s estate – circa £900,000, unsecured liabilities in the bankruptcy estate – circa £1.6 million, and total deficiency in the bankrupt’s estate was circa £751,000. Firstly, this case involved an unfit conduct, the bankrupt failed to disclose that whilst insolvent he transferred circa £900,000 for no consideration to a family member. Secondly, this case involved a contractor who contracted through an umbrella company for a few years. The end client pays the umbrella company for the services of the contractor. The umbrella company then pays the contractor a nominal salary and a larger sum in the form of a loan. HMRC deemed this arrangement was a disguised renumeration (DR) scheme, which is tax evasion rather than tax avoidance. This was because the loan was deemed not to be a genuine loan, and consequently the bankrupt became subject to an HMRC loan charge of circa 1.2million. Thirdly, the umbrella company submitted a proof of debt (POD) of circa £967,000 following dividends recovered from the bankrupts’ assets. The official receiver refused the POD on the basis that the scheme was promoted on the basis that the loans were not repayable, and the bankrupt was now subject to an HMRC loan charge. The bankrupt had no expectation that the loans would be repayable. Furthermore, the umbrella company had not provided a loan agreement which confirms that the loans are repayable. - Company in liquidation, amount owed to petitioning creditor - circa £155,000. In this case, the sole director of the insolvent company lodged an appeal to rescind the winding up order against the company.

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Memberships

- The Honourable Society of Inner Temple

Testimonials

Thank you for picking this up late, and for your work on the case in securing the order on favourable terms. Much appreciated. The client has also said of you, “He was brilliant and a pleasure to work with”.

Sam Brown Solicitor
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