Director of century-old Scottish machinery firm banned after under-declaring VAT by more than £1.5 million
Source: gov.uk (2025-08-12)

The company entered administration owing more than £3 million

- David Smith submitted false VAT returns on behalf of long-established Scottish machinery firm Balgownie Limited across a three-year period
- In total, more than £1.5 million was undeclared to HM Revenue and Customs (HMRC) between 2019 and 2022
- Smith has been banned as a director for 11 years and the company was bought out of administration by another firm last year, with 15 jobs saved
The director of a century-old Scottish machinery firm which went into administration last year has been banned after failing to declare more than £1.5 million in VAT.

David Smith, 61, was the director of FB Realisations Limited, which was known for decades as Balgownie Limited.

However, for more than three years between 2019 and 2022, Smith submitted false VAT returns on behalf of the company in his role as finance director without the knowledge of his fellow directors.

Smith, of Kirkton of Bourtie, Inverurie, Aberdeenshire, has been disqualified as a company director for 11 years following investigations by the Insolvency Service.

Mike Smith, Chief Investigator at the Insolvency Service, said:

David Smith’s conduct falls well below the standards we expect of company directors.

Smith’s misconduct was hidden from his other directors and only came to light when a consultant queried finances at a board meeting and he admitted that he had been manipulating the accounts for several years.

By deliberately suppressing VAT payments, Smith deprived the public purse of vital funds that should have gone towards essential public services such as schools and the NHS.

Balgownie Limited was set up on Companies House in 1973 but had a trading history dating back to 1907.

The undeclared VAT totalling £1,575,584 consisted of:
- Falsely claiming VAT refunds on expenses that were actually for private or personal use rather than legitimate business purposes in the quarter ending December 2018
- Deliberately understating the amount of tax due on sales made between March 2019 and March 2022, across multiple quarterly returns
- Falsely claiming refunds by backdating purchases to earlier tax periods without having valid invoices or evidence to support these claims
Smith signed a disclosure with HMRC in March 2023 where he admitted deliberately under-declaring the amount of VAT his company should have paid.

Balgownie Limited went into administration in March 2024, with 24 people losing their jobs and creditors owed £3,163,795.

However, 15 jobs were saved when the business and its assets were bought out of administration by another company the following month.

The Secretary of State for Business and Trade accepted a disqualification undertaking from Smith, and his ban started on Monday 21 July.

It prevents him from being involved in the promotion, formation or management of a company, without the permission of the court.

Smith was declared bankrupt in August 2024 following a petition from one of the company’s creditors.

Further information
- David Smith is of Kirkton of Bourtie, Inverurie, Aberdeenshire. His date of birth is 17 May 1964
- FB Realisations Limited (https://find-and-update.company-information.service.gov.uk/company/SC053574) (company number SC053574)
- Individuals subject to a disqualification order or undertaking are bound by a range of restrictions (https://www.gov.uk/government/publications/corporate-insolvency-effect-of-a-disqualification-order)
- Further information about the work of the Insolvency Service, and how to complain about financial misconduct (https://www.gov.uk/government/organisations/insolvency-service)