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Tax investment scheme directors face six-year bans

Pathway windingThree Dorset-based directors have been banned for six years each over their involvement in a £70m unregulated investment scheme.

The Insolvency Service first launched an investigated into the directors’ firm Ethical Forestry in after it entered voluntary liquidation in December 2015.

The disqualification undertakings – rulings that have the effect, without permission of a court, that a person with a disqualification cannot act as a director of a company – are effective as of 21 March.

The Insolvency Service found the three directors, Matthew John Pickard, Stephen Phillip Greenaway and Paul Adam Laver, caused the company to transfer £7.2m for their benefit and continued to defraud investors for 12 months after the launch of an investigation by HM Revenue and Customs.

HMRC had first contacted Ethical Forestry and the three directors in March 2013 with plans to investigate its new tax planning schemes.

It then issued further notice in 2015 claiming around £14m of liabilities for tax years 2011/12 and 2012/13.

Insolvency Service chief investigator Anthea Simpson says: “This is a relatively unusual case as the conduct of the directors criticised occurred before HMRC has issued their determinations of Ethical Forestry’s liabilities.

“The directors were aware that HMRC were investigating the scheme through which they had already drawn very substantial sums from the company, yet in this knowledge the continued in the same vein for a further 12 months, taking an additional £7.2m.

“We considered that this was unacceptable rather than ethical, and amounted to unfit conduct with justified disqualification.”

Ethical Forestry had used unregulated brokers to offer free pension review before introducing prospective clients to plantation investment opportunities under it’s 80 per cent-owned Costa Rican plantation land company.

Some 3,500 UK investors placed around £70m into the unregulated scheme to own trees in the plantation, including some who had transferred occupational pensions into Sipps via embattled provider, Liberty Sipp.

Claimants to pursue Liberty Sipp over unregulated investments

The directors then caused Ethical Foresty to enter into the tax planning scheme in 2012 which saw £28.8m made available to them through loan accounts.

Financial statement for the company from 2012, 2013 and 2014 show a total £19m was drawn by the directors. This figure includes the £7.2m drawn after the launch of HMRC’s investigation.

HMRC assistant director of counter-avoidance Simon Chaplin says: “HMRC welcomes the actions of the Insolvency Service in obtaining disqualifications on this case.

“Where directors cause companies to use tax avoidance schemes for personal benefit and put uncollected tax at risk and they should be held accountable.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Never mind the Tax Man, what about the scammed investors who have lost £70 million in this organised fraud with Liberty Sipp and others.

  2. Does anybody else think a prospective 6 year ban is justice ?

    Would not a long prison sentence and a seizure of all personal (and spouse) assets be more appropriate ?

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