Brothers who ran Bombay Brasserie in Grantham under-reported earnings, leaving taxpayers £500,000 out of pocket

Three brothers who ran an Indian restaurant in Grantham systematically under-reported earnings, leaving taxpayers more than half a million pounds out of pocket.

Abul Azad and Abul Ashraf have both been banned from acting as company directors for seven years while Abul Khaled has been banned for three-and-a-half years for their actions.

Together than ran Bombay Brasserie in London Road, Grantham as well as the Apurba and Tandoori Knights Indian restaurants in Melton Mowbray, where they lived.

The trio were directors of A & A (Melton Mowbray) Limited and shared the running of their restaurants.

However, they deliberately or recklessly destroyed or removed sales records in their company accounts in order to avoid paying the full VAT and corporation tax amounts that were due. In total, £566,749 was owing to HMRC when the brothers placed the company into liquidation.

Throughout the Insolvency Service investigation, the brothers sought to discredit and place blame on the company’s accountant, despite receiving written warnings from the accountant in successive years that the company had inadequate record keeping processes in place and that it was obvious that cash and sales records were going missing.

In some cases, sales identified solely through card payment data was found to be more than their total reported sales, which also included cash payments.

Abul Azad, 57, and Abul Ashraf, 50, signed disqualification undertakings accepting that they caused or allowed the company to suppress its sales over a period of at least four-and-a-half years, to the detriment of HMRC. Their bans began on July 6 and last for seven years.

Abul Khaled, 44, who was only a director of the company for a short time during the period, admitted to causing or allowing the company to suppress its sales over a period of at least eight months. His ban of three-and-a-half years also begins on July 6..

Cassandra Dowthwaite, deputy head of Insolvent Investigations (North) at the Insolvency Service, said: "This ban should serve as a warning to other directors tempted to conceal sales and withhold taxes, which are needed to fund vital public services, for their own benefit.

"Companies have limited liability, which is a privilege, not a right, and The Insolvency Service have strong enforcement powers which we will not hesitate to use to remove that privilege from dishonest or reckless directors."