Upton's 14-year ban too lenient, say contractor accountants

A 14-year ban for a jailed accountant who ripped off hundreds of IT contractors is “pointless”, because someone else could still ‘front’ a company for him while he pulls its strings from the shadows, contractor accountants say.

Darren Upton, jailed last February for six years, was this month disqualified from being a limited company director until 2027, following a lengthy investigation by The Insolvency Service.

But in cases like Mr Upton’s, preventing the offender from being a company director is “pointless and ineffective as a punishment - regardless of the length of the ban," believes Derek Kelly, managing director of ClearSky Accounting.

He told ContractorUK: “It’s far too easy for such individuals to arrange for others to be named as directors in the eyes of the law, while maintaining a significant influence over a company from the shadows.”

Despite the disqualification order preventing Upton from acting as a company director, or taking part (directly or indirectly) in promoting, forming or managing a company (or a LLP), another contractor accountant shares Mr Kelly’s concerns.

“Both HM Revenue & Customs and the FSA have acted to prevent him [Upton] having the ability to operate as a director in the future, but there is a risk he could have someone ‘front’ a company for him,” warns The Low Tax Group.

Contractor accountancy firm DNS Associates agreed: “Upton cannot be a limited company director [for 14 years], but he might find accomplices, such as a friend or even his wife, to help him run a business not registered in his name.”

The firm’s managing director, Sumit Agarwal, points out that there was a way to stiffen what he says is “too lenient” a punishment for Upton’s “astonishing level of dishonesty”, but an accountancy body ducked it.

“The Association of Certified Chartered Accountants found Upton guilty of misconduct on three counts but quite frankly, his ban from ACCA membership should have been for his lifetime, not just five years," said Mr Agarwal.

“On no account should this practitioner ever again hold practice membership, so on this basis I believe that the ACCA is failing both its members and the general public.”

Upton’s defenders would likely counter that he is being punished for his fraud and deception with a jail sentence.

But The Low Tax Group’s managing director, Richard Bayliss, believes the six-year term is “unlikely to be much comfort to those [former clients of Upton & Co] who have suffered financially.”  

Rather than just imprisonment, Mr Kelly preferred: “If the authorities want to create a genuine deterrent, they should aim to seize an individual’s personal assets and wealth. This would be adequate punishment for someone who has betrayed his or her clients’ trust.”

A similar appeal to officialdom was sounded by Mr Agarwal: "The justice system needs to get tougher with this sort of individual who, in this case, clearly has a problem with recognising the boundaries that separate right from wrong."

He added: "On his release from prison, therefore, should Upton attempt to become a director of a company or try to register for professional accreditation, the door should be firmly shut in his face."

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Written by Simon Moore

Simon writes impartial news and engaging features for the contractor industry, covering, IR35, the loan charge and general tax and legislation.
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