LTD Company & Business rates

simpywimpy

Is business rates debts any different to any other debt if your limited company goes under?

They seem to be contacting my son who was one of two directors of a firm that folded asking for £6000 in business rates to the end of their lease - a lease they have broken because they cant pay it.

The sent all debtors a letter informing them that the firm was insolvent without assets but they say they didnt receive it and are now asking for companies house not to approve dissolution of the company.

Just checked with companies house and it states dissolved. Can they come after the ex-directors personally?

davec1960

Who is they?

Local council or landlord

If local council then there is no problem, the debt belongs to the Ltd company.
If landlord it would depend upon the terms of the lease and whether they gave any PGs

InsideInsurance

Presumably the company was voluntarily dissolved? They cant go after the directors personally but they can get the company reinstated and make it go down the insolvency route to prove it has no assets and obviously affect your sons ability to be a director in another company in the near future

Wywth

simpywimpy wrote: »

Is business rates debts any different to any other debt if your limited company goes under?

They seem to be contacting my son who was one of two directors of a firm that folded asking for £6000 in business rates to the end of their lease - a lease they have broken because they cant pay it.

The sent all debtors a letter informing them that the firm was insolvent without assets but they say they didnt receive it and are now asking for companies house not to approve dissolution of the company.

Just checked with companies house and it states dissolved. Can they come after the ex-directors personally?

It would depend if there is any suggestion of false trading, deceit, etc involving the directors. If so, the directors could be held personally liable.

I suggest your son gets some independent legal advice.

simpywimpy

Its the local council that are challenging it. Companies House took the company off because they had failed to submit the accounts but by then, the company was on its last legs anyway.

They took advice from their small business advisor who told them to resign as directors which they did in August I believe.

The council paid an overpayment back of £300 to one director which the council said the company was owed. They now say the director should not have claimed it yet it was the council who sent the form saying they were.

Now they are saying that they want that overpayment back PLUS £6000 because the building owner they had on lease, says they are still responsible for business rates on it.

I would have thought that this was all on the business itself which had no assets when it closed.

As the director who claimed the overpayment back is no longer a director, and the company itself is now dissolved. Should he still pay the £300 back out of his own pocket?

davec1960

simpywimpy wrote: »

The council paid an overpayment back of £300 to one director which the council said the company was owed. They now say the director should not have claimed it yet it was the council who sent the form saying they were.

Now they are saying that they want that overpayment back PLUS £6000 because the building owner they had on lease, says they are still responsible for business rates on it.

The overpayment should have been made to the Ltd company not the director.

The building owner will no doubt be saying that someone else is responsible for the rates as he will know that the council will come chasing hin for the rates certainly from the time that the company was dissolved and possibly from the time they applied to dissolve the company.

Did your son have the leased checked by a solictor before signing?
If so then the solicitor should have advised if there were any clauses that could come back to bite your son such as PGs.

I personally wouldn't make any repayment of the overpayment to the council, tell them the ltd company was responsible for the rates.
Don't pay it just to get them off your sons back, it won't work and could make it worse.

simpywimpy

I presumed my son claimed it as director on behalf of the company as that was the name on the bill (Company). The council has written to companies house objecting to the strike off but surely, as my son is no longer the director, it has nothing further to do with him?

Thanks for the advice Davec1960

davec1960

InsideInsurance wrote: »

Presumably the company was voluntarily dissolved? They cant go after the directors personally but they can get the company reinstated and make it go down the insolvency route to prove it has no assets and obviously affect your sons ability to be a director in another company in the near future

To pursue the insolvency the council would need to find an IP to liquidate the company and investigate. This costs money as an IP will not take on work without a guarantee of payment.
My last company was struggling and the IP wanted £9k up front to liquidate the company.
In the OPs sons case they would want a guarantee from the council that they would pay the fees. I doubt the council will pursue it unless they are very confident that there is some money to be found upon investigation.

Even if they went down this route it would not affect the OPs sons ability to be a director in the future unless the IP found evidence of serious wrongdoing.