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Friday, 31 October 2014

Importance of Keeping Business Records

Three directors of a lapdancing club were found guilty of failure to keep proper accounting records between January 2008 and 2010.

Ross Connock, Matthew Sharp and Richard Taylor, who owned Divas Gentlemen’s Club based in Newquay pleaded guilty to the offences at Exeter Crown Court. In addition, Connock admitted a charge of false accounting in the same timeframe.

The trio were directors of RMR Newquay, which was incorporated in 2003 and went into liquidation in 2010. At that time the firm owed HMRC £240,000 in unpaid VAT.

Taylor and Sharp were sentenced to four months in prison each, suspended for two years at Exeter Crown Court. Due to illness Connock's sentencing was deferred for six months.

The judge said the case was of a company with a "woeful disregard for basic accounting".

In summing up, Judge Carr said: "Accounts were produced for 2004, 2005 and 2006 but 2007 accounts were only prepared in 2009 and there were no accounts for 2008 or 2009. Both of you were directors and were aware of the responsibility."

"This was predominantly a cash business, which brings even greater responsibility on directors to ensure correct accounting."

According to the West Briton, the offences came to light when the business went into liquidation and was examined by an administrator.

Department for Business, Innovation and Skills investigation officer John Pearson said following the hearing, that there weren't any accounts at all - "that was the bottom line".

He added that the largely cash business had a turnover of around £1m each year and that it had failed to keep business accounts. Although it wasn't clear whether this was incompetence or dishonesty.

Money had been moved from RMR Newquay into other companies Taylor and Sharp owned. It was not known how much other parties and HMRC had lost.

Taylor was ordered to pay £6,000 towards the costs of prosecution and Sharp was ordered to pay £4,000.

Rachael Power - AccountingWeb