Flack Building Contractors, which provided electrical contracting services to commercial clients and local housing associations, went into liquidation in July 2011 owing £253,111 to creditors.

The majority of this was owed to HM Revenue and Customs in unpaid taxes.

An Insolvency Service investigation showed that on February 2011, Flack sought advice from an Insolvency Practitioner regarding his company’s financial position.

He was advised that his firm was insolvent and Flack told the insolvency specialist that he would cease to trade that month.

In fact he continued to trade while making no attempt to repay the taxes owed and incurring further tax debt, which also went unpaid.

Furthermore Flack paid out £60,676 from the company to himself or for his personal benefit.

Mark Bruce, a Chief Examiner at The Insolvency Service said: “Directors who seek an unfair advantage over their competitors by not paying tax are damaging commercial confidence and harming the UK’s reputation as a place to do business.

“They should not expect to get away with it.

“Other directors tempted to follow this path should remember that if they run a business in a way that is detrimental to either its customers or its creditors they lose the protection afforded by limited liability.

“The Insolvency Service will investigate them and seek to remove them from the business environment.”