At last action is planned against the widespread culture of directors who flout the law by ignoring fines and other company debts.
The Government says it wants to bring in new measures that will make directors personally responsible if they shut down their company to avoid paying up.
I’ve told before how bosses routinely make a mockery of Home Office penalties for employing illegal immigrants by simply ignoring them.
Last October, I revealed how one Birmingham recruitment company boss, Shane Khattak, never paid five separate Home Office penalties that totalled £140,000 before being banned as a director.
The Information Commissioner has routinely faced the same problem when it fines cold-calling companies.
In May last year, it imposed its biggest ever fine of £400,000 on Keurboom Communications, run by Greg Rudd of Cambridge, for making almost 100 million nuisance automated calls.
Keurboom went into liquidation without paying a penny.
The problem also exists at employment tribunals, with Citizens Advice saying it gets about 16 complaints a month from people who say their ex-employers have ignored orders to pay awards.
Earlier this month, personnel industry website People Management revealed £395,000 in tribunal awards had gone unpaid last year after the former employers shut down.
Victoria Philips, of Thompsons Solicitors, a specialist in employment rights, said: “It’s a perennial problem.”
She added: “One of the scandals is that when these companies go under, they're a burden on the state because the government pays out the money.
“There does not seem to be any state intervention to try to get the money back when these people set up a new company down the road doing the same business.”
The Health And Safety Executive has also experienced dealing with businesses that flout fines.
Construction company 5 Star Builders Limited was ordered to pay £100,000 at Guildford crown court in Surrey, which heard how it put profit before the safety of workers and ignored previous prohibition and improvement notices.
Director Joel Koppel has now been banned from running firms for six years after 5 Star Builders went into liquidation without paying the fine.
Business minister Kelly Tolhurst said a “minority of directors are recklessly profiting from dissolved companies”.
The proposed new rules will also affect directors who dissolve companies to avoid paying staff pensions.
The only trouble is that there's no time frame for their introduction. Legislation is needed to bring in this new power and details of when that might happen have yet to be announced.
