The former chief executive of charity Broken Rainbow has been banned from being a director for three and a half years for “failing to ensure the company met its tax obligations,” the Insolvency Service has said.
Broken Rainbow, which was the UK’s only dedicated LGBT domestic abuse charity, announced that it was closing down in June 2016. This followed a public announcement that it was “days from closure” which resulted in it being bailed out by a £120,000 grant from the Home Office.
The National Audit Office published a report into circumstances which led to the closure of Broken Rainbow in April 2017, which found that the Home Office failed to meet its own monitoring requirements for the grants it gave to the charity.
Broken Rainbow’s former chief executive Jo Harvey-Barringer, who was a company director of the organisation, has been banned from being a director, effective from 27 June 2018 for three years and six months.
An operational compliance case run by the Charity Commission remains ongoing.
For the duration of the ban she cannot be a director of any organisation or directly or indirectly become involved, without the permission of the court, in the promotion, formation or management of a company or limited liability partnership.
The Insolvency Service said that at the start of 2016, following “further delays in Home Office funding and a review of the charity’s financial stability it became apparent that payments had not been maintained to HMRC in respect of the charity’s PAYE debt”.
Serious concerns
In addition, charity trustees had serious concerns over how it could continue to deliver its services and sought advice from an Insolvency Practitioner.
Following this, the charity was placed into creditors voluntary liquidation on 5 July 2016.
Between December 2014 and May 2016, payments amounting to £143,671 were made to Harvey-Barringer, at a time when only £3,490 was paid in respect of the PAYE liability incurred during that period. This included a single payment of £12,500 made to her on 08 April 2016.
On 6 June 2018, the secretary of state accepted a disqualification undertaking from Harvey-Barringer, after she admitted failing to make payments to HMRC, while continuing to make payments to herself and other creditors.
Anthea Simpson, chief Investigator with the Investigation and Enforcement Services of the Insolvency Service, said: “This ban should serve as a warning to other directors, particularly to those operating in the charity sector, that Company directors have a duty to ensure businesses meet their legal obligations, including paying taxes.
“Deliberate neglect of tax affairs whilst paying others is not a victimless action as it deprives the taxpayer of the funds needed to operate public services and if they put their own needs before them they could be investigated by the Insolvency Service and lose the privilege of limited liability trading.”
A Charity Commission spokeswoman said: "We are aware of the disqualification of the former CEO of the charity and are considering this development as part of our existing regulatory case involving the charity. Once that case has concluded, we intend to publish a report, setting out our findings and conclusions."
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