[UK] Director ban for payroll boss over role in tax avoidance scheme

A payroll services boss has received an eleven-year ban from operating as a company director after orchestrating a multi-million-pound tax avoidance scheme, FT Adviser reports.

Scott Rooney was appointed sole director of Magnetic Push Limited in February 2017. Trading from an office in Liverpool, the company provided payroll services and was previously known under the names The Knowledgeshares Limited and My PSU Subcontractors Limited.

Magnetic Push operated for just 11 months before the company went into liquidation and was voluntarily wound up. But the liquidator told the Insolvency Service that Rooney refused to cooperate and failed to provide Magnetic Push’s books and records.

Following an Insolvency Service investigation, it was discovered that Magnetic Push was playing an active role as an umbrella company in a wider tax avoidance scheme.

Mr Rooney had reportedly declared a VAT liability of just £609, however, the tax authorities claimed more than £4m from Magnetic Push in the liquidation. The company also failed to declare PAYE and National Insurance contributions.

The lack of books and records left investigators unable to establish genuine company expenses from almost £37m that had left the company account between February and December 2017 or determine the reasons behind the company’s failure.

Now Mr Rooney has been disqualified as a company director for eleven years; meaning he is banned from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.

Martyn Pettitt - deputy head of insolvent investigations at the Insolvency Service - said, “Scott Rooney’s significant ban shows how important it is for company directors to keep adequate books and records, and the measures that can be taken if they do not take this responsibility seriously.

“Directors like Scott Rooney cannot avoid scrutiny or sanctions when operating within a tax avoidance scheme by placing their company into insolvency and failing to cooperate and we will not hesitate to seek a ban where it is appropriate to do so.”

A payroll services boss has received an eleven-year ban from operating as a company director after orchestrating a multi-million-pound tax avoidance scheme, FT Adviser reports.

Scott Rooney was appointed sole director of Magnetic Push Limited in February 2017. Trading from an office in Liverpool, the company provided payroll services and was previously known under the names The Knowledgeshares Limited and My PSU Subcontractors Limited.

Magnetic Push operated for just 11 months before the company went into liquidation and was voluntarily wound up. But the liquidator told the Insolvency Service that Rooney refused to cooperate and failed to provide Magnetic Push’s books and records.

Following an Insolvency Service investigation, it was discovered that Magnetic Push was playing an active role as an umbrella company in a wider tax avoidance scheme.

Mr Rooney had reportedly declared a VAT liability of just £609, however, the tax authorities claimed more than £4m from Magnetic Push in the liquidation. The company also failed to declare PAYE and National Insurance contributions.

The lack of books and records left investigators unable to establish genuine company expenses from almost £37m that had left the company account between February and December 2017 or determine the reasons behind the company’s failure.

Now Mr Rooney has been disqualified as a company director for eleven years; meaning he is banned from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company.

Martyn Pettitt - deputy head of insolvent investigations at the Insolvency Service - said, “Scott Rooney’s significant ban shows how important it is for company directors to keep adequate books and records, and the measures that can be taken if they do not take this responsibility seriously.

“Directors like Scott Rooney cannot avoid scrutiny or sanctions when operating within a tax avoidance scheme by placing their company into insolvency and failing to cooperate and we will not hesitate to seek a ban where it is appropriate to do so.”