Restaurateur banned after concealing £130,000 in tax

The restaurateur behind Glasgow’s Cyan restaurant has been disqualified from holding a company directorship for nine years after he concealed over £130,000 in tax from HMRC.

David Cowan was the sole director of Avenbrae, the company behind Cyan restaurant on Stewart Street in Milngavie, outside Glasgow, which began trading in August 2014.

However, Cowan did not register the company for VAT until a year later, in August 2015.

He then failed to ensure the company filed quarterly VAT returns, which caused HMRC to raise assessments on the company’s behalf, which were only partially paid.

In June 2017, an HMRC investigation uncovered that the company had been concealing VAT since August 2014. In September 2017, HMRC requested immediate payment of the outstanding amount.

At the same time, several new restaurants and a hotel in the area negatively impacted footfall to Cyan and, by January 2018, Cowan had placed Avenbrae into creditors voluntary liquidation.

At the point of liquidation, the company owed HMRC £195,000 in VAT, which included fines for unpaid tax and VAT due for the final quarter of trading. In addition, the company owed other creditors almost £23,000.

In August 2019, Cowan was banned from directly or indirectly becoming involved, without the permission of the court, in the promotion, formation or management of a company for nine years.

Robert Clarke, chief investigator for the Insolvency Service, said: “David Cowan failed to observe his statutory duties as a company director to comply with VAT obligations, and his business gained a competitive advantage as a result, which is unacceptable behaviour. Any other directors who behave in this way should expect an Insolvency Service investigation and a lengthy ban.”