A Director of a firm which provided labour for the construction industry has been banned for 11 years after causing significant losses to HMRC.

Ravinder Singh Mandair, 45, of Oldbury, West Midlands, caused HMRC to lose £1.45 million whilst acting as Director of Worldwide Tradin Services (UK) Limited (WTS) (CRO No, 06509626).

The now defunct WTS entered creditors’ voluntary liquidation in 2012 with a £2.7 million deficiency to unsecured creditors. At the time, its realised assets stood at just over £141,000 with towering liabilities of almost £2.85 million.

Also, in its failures to maintain proper records, the purpose of £2.9 million cash withdrawals from the WTS bank account could not be explained.

An investigation by the Insolvency Service found that Mr Mandair has caused the once active WTS to be involved in a scheme which informed HMRC that its employees were subcontractors that were registered for VAT and eligible to be paid without deduction for income tax under the Construction Industry Scheme.

This allowed WTS to reclaim VAT which it wasn’t entitled to and could also pay its employees without making income tax and national insurance deductions.

Official Receiver of the Public Interest Unit, Ken Beasley, described the scheme as ‘sophisticated.’

“This was a sophisticated and lucrative attack on the public purse which caused considerable losses to HM Revenue and Customs,”

“Investigations showed evidence of collusion between WTS, its suppliers and accountants. Mr Mandair’s lengthy disqualification reflects the severity of the misconduct perpetrated.” He added.

The provisional liquidator seized WTS’ record of payments which were handwritten in black books exposing how the scam had been operated, it was estimated that VAT losses to HMRC in this instance amounted to £469,000 as a result.

The investigation also found that the VAT claimed by WTS on labour supplies amounted to £1.45 million which included the £469,000 from the black books transactions.

It is believed that the income tax liability owed to HMRC is considerable but has not been quantified.

Mr Mandair has given his undertaking to the Secretary of State for Business, Innovation and Skills, not to act as a Director until 2026.