During the pandemic, the company incorrectly claimed £50,000 in taxpayer support through the Eat Out to Help Out and furlough initiatives.
Ifraz Nabi, 41, of Manchester, has been barred from holding a directorship for seven years after claiming £30,000 in the Eat Out to Help Out scheme and more than £20,000 in the Coronavirus Job Retention Scheme.
Ifraz Nabi was the sole owner and operator of New York Krispy Fried Chicken on Stockport Road in Greater Manchester.
New York Krispy Fried Chicken Limited, the firm behind the takeaway, fell into insolvency in November 2020, prompting an investigation by the Insolvency Service.
Nabi failed to keep proper finances and financial records, as required by his directorship, according to investigators.
As a result, the claims he made through government assistance programs could not be substantiated because there was little information about sales and no explanation of how such sales could have been made while employees were on furlough.
Even if records existed to support his claim under the Coronavirus Job Retention Scheme, which allowed employers to pay furloughed employees while their businesses were closed, the shop was not eligible for funding under the Eat Out to Help Out scheme, which was only for restaurants with indoor seating.
Takeaway restaurants without sitting were eliminated, and while New York Krispy Fried Chicken did have some seating, the majority of its orders were placed through apps, which were also removed from the system.
Furthermore, Nabi had failed to register the firm for tax, and when the company fell into insolvency as a result of the epidemic and lockdown, the liquidators were unable to determine how much unpaid tax the company owed.
Ifraz Nabi acknowledged to failing to save, retain, or deliver up necessary accounting records, as well as failing to register and account for VAT as required, and the Secretary of State for Business, Energy, and Industrial Strategy accepted a disqualification undertaking from him.
His disqualification will take effect on May 31, 2022, and will endure for seven years.
Without the court’s authorization, Nabi is prohibited from becoming involved in the promotion, establishment, or management of a firm, either directly or indirectly.
Nina Cassar, the Insolvency Service’s Deputy Head of Investigations, said:
One of the main purposes of the Company Director’s Disqualification Act is to ensure that company directors adhere to minimum standards. Ifraz Nabi failed not only to maintain the accounting records of his company, he failed to register and pay his business taxes, and furthermore abused Covid-19 support schemes designed to support businesses in genuine need.
This disqualification should serve as a reminder that the Insolvency Service will take action against those who abuse their position and do not take their obligations seriously.
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