Case details for FAISAL ALI

Name: FAISAL ALI

Name: Smartbuy Direct Ltd

Date of Birth: / /

Date Order Starts: 28 / 5 / 2019

Disqualification Length: 6 Years 0 Month(s)

CRO Number: 09420845

Last Known Address: 27 The Oval,, , , , DEWSBURY,, WF13 4HR

Conduct: Mr Faisal Syed Ali (“Mr Ali”) failed to register Smartbuy Direct Ltd (“Smartbuy”) for Value Added Tax (“VAT”) when Smartbuy’s turnover had exceeded the requisite VAT threshold requiring registration, causing H M Revenue & Customs (“HMRC”) to raise assessments of VAT of £644,176 in respect of Smartbuy’s trading activities, and penalties of £383,284, which were owed by Smartbuy at Liquidation.

  • A company is required to register for VAT with HMRC when it’s turnover exceeds a certain amount. In the tax year 2015/16 the threshold for compulsory registration for VAT was £82,000;
  • He stated that Smartbuy commenced trading in April 2015 and Smartbuy’s first purchases to enable it to commence trading took place on 10 April 2015 for goods totalling 149,448 Euros. At the latest, based on exchange rates at that time Smartbuy would have exceeded the threshold in respect of those initial purchases when the goods were sold to customers by Smartbuy. In total, between 10 April 2015 and 21 April 2015, Smartbuy purchased goods from its supplier of 301,187 Euros;
  • Smartbuy submitted an application to register for VAT form to HMRC, which was received by HMRC on 16 October 2015. The application form requested that Smartbuy be registered for VAT from 01 November 2015, and stated that Smartbuy was applying for voluntary registration for VAT as Smartbuy’s turnover was currently below the VAT threshold, and that Smartbuy’s estimated turnover during the next 12 months would be £90,000. The form also stated that Smartbuy estimated that it would purchase goods from other EU member states of £70,000 during the next 12 months. The application form was signed by him on behalf of Smartbuy. On receipt of the application form HMRC registered Smartbuy for VAT with effect from 01 November 2015;
  • On 14 December 2015 HMRC contacted Smartbuy in order to arrange a visit to Smartbuy’s business premises. He informed HMRC that Smartbuy had not traded, as a result of which HMRC deregistered Smartbuy for VAT on 14 December 2015;
  • After Smartbuy entered liquidation HMRC received information from VAT authorities in other EU member states regarding Smartbuy’s trading and HMRC commenced an investigation into Smartbuy’s affairs. As a result HMRC amended the effective date of registration for VAT of Smartbuy from 01 November 2015 to 10 April 2015 due to Smartbuy ‘breaching the VAT registration threshold of that date’;
  • Based on copies of purchase invoices of goods purchased from suppliers in EU countries by Smartbuy, for onwards sale to members of the general public in the UK, HMRC made best judgement assessments of VAT due by Smartbuy in the period between 10 April 2015 and 12 November 2015 of amounts totalling £644,176.
  • As a result of the assessments of VAT made by HMRC against Smartbuy, HMRC also imposed inaccuracy penalties on Smartbuy under Schedule 24 of the Finance Act 2007 totalling £383,284. The Penalty notice issued to Smartbuy by HMRC stated that the Penalty was incurred as Smartbuy ‘failed to notify HMRC that you had traded with EU suppliers and purchased stock from the EU for resale in the UK. You also failed to submit a VAT return to HMRC advising that you had purchased goods from the EU. I am of the opinion that the behaviour is deliberate as you stated that the Company had never trained (sic) when asked by an HMRC officer by telephone.’; HMRC have submitted a claim in the liquidation, dated 18 October 2018, for an amount of £1,027,460, being VAT of £644,176 and a Penalty of £383,284. 

    This information is correct as at 31 / 7 / 2019



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