Director of Scottish machinery dealer banned for tax evasion

A former director of Scottish machinery firm Balgownie has been banned from holding similar executive positions for 11 years for failing to declare more than £1.5m in VAT, following an investigation by the Insolvency Service.

David Smith from Aberdeenshire was found to have submitted false VAT returns over a three-year period between 2019 and 2022 in his role as finance director at the firm.

Balgownie went into administration in March last year, with more than £3m owing to creditors. The business and assets were acquired in April 2024 by MacGregor Industrial Supplies.

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Smith was found to have submitted the false returns without the knowledge of other directors, which included claiming VAT refunds for expenses that were actually for private and personal use.

He was also found to have deliberately understated the amount of tax due on sales during the three-year period and to have backdated purchases to previous tax years without valid invoices.

Mike Smith, chief investigator at the Insolvency Service, said: “David Smith’s conduct falls well below the standards we expect of company directors.

“Smith’s misconduct was hidden from his other directors and only came to light when a consultant queried finances at a board meeting and he admitted that he had been manipulating the accounts for several years.

“By deliberately suppressing VAT payments, Smith deprived the public purse of vital funds that should have gone towards essential public services such as schools and the NHS.”

Smith disclosed to HMRC in March 2023 that he had deliberately under-reported the amount of VAT owed, and was declared bankrupt in August 2024.