Ltd Co dissolved still owing Corporation Tax

SteveABZ_2

Yes, I am able to meet the payment plan. Another worry was that HMRC would think I was deliberately trying to avoid the liability, but I will put it in writing to them that I am taking personal responsibility for it and will continue payments, so hopefully that will be ok with them.

sangie595

DandelionPatrol wrote: »

He seems to have done some bad things, but I don't see any of it as trading.

And that would be why you don't know what you are talking about.

If you know that you have no money to pay a debt, and then agree to pay a debt (from money you know you do not have) - and you know all of this - what would you call it? You do not have to "trade". - you have to enter into commitments that you know you will not be able to meet.. If you have an overdraft at the bank and tell them you will repay 10% of it when you don't have any money to pay anything at all - are you suggesting that you don't know what you are doing?

persa

SteveABZ wrote: »

Thanks for the responses. This was my first Ltd Co and simply a vehicle for getting paid for contract work. I am aware of my shortcomings as sole Director and there was never any intention to avoid paying the tax due. HMRC are the only creditor. What I will do now is contact HMRC and explain the situation, as I do honestly intend to honour the debt (I personally spent HMRC's money, after all).

Where I am now concerned is that due to the company being dissolved, and the repayment agreement being between the company and HMRC, the repayment plan is now invalid. Can it be kept going if the company is dissolved.

My accountant did tell me to make sure that the company had no debt prior to submitting form DS01. Needless to say they are surprised that I did not follow correct procedure and that HMRC did not object to the winding up (I assumed, wrongly, that they would monitor the Gazette etc and object as matter of course).

Obviously ignorance is no excuse in the eyes of the law, so I am going to have to hope that the people I deal with re this understand that I want to repay the debt, and am not running away from it.

As the company has only just been dissolved, the HMRC record is probably still open. When HMRC twig it's been dissolved, they really should petition to get the company reinstated, but they may just close down the record and give up. Really depends on the tax office dealing with your company.

Ignoring HMRC's shortcomings, the right thing to do would be to settle the debt and the practical thing to pre-empt HMRC's response, plead ignorance and offer to settle the outstanding liability personally.

With a striking off (as opposed to a liquidation), you don't have any control over when the process is complete, so I would advise telling HMRC that whilst you intended to close down the company, you didn't realise it would be completed so quickly, and asking if it would it be okay for you to settle the debt now without them having to take any further action.

Mind you, you do refer to a payment plan - does that mean you can't actually afford to clear the debt right now? How long do you intend to take to pay it off, assuming HMRC are amenable?

SteveABZ_2

persa wrote: »

As the company has only just been dissolved, the HMRC record is probably still open. When HMRC twig it's been dissolved, they really should petition to get the company reinstated, but they may just close down the record and give up. Really depends on the tax office dealing with your company.

Ignoring HMRC's shortcomings, the right thing to do would be to settle the debt and the practical thing to pre-empt HMRC's response, plead ignorance and offer to settle the outstanding liability personally.

With a striking off (as opposed to a liquidation), you don't have any control over when the process is complete, so I would advise telling HMRC that whilst you intended to close down the company, you didn't realise it would be completed so quickly, and asking if it would it be okay for you to settle the debt now without them having to take any further action.

Mind you, you do refer to a payment plan - does that mean you can't actually afford to clear the debt right now? How long do you intend to take to pay it off, assuming HMRC are amenable?

The repayment plan is in the company name, over 12 months. The payments are being paid from my personal earnings, as the company has no money and the business account is now frozen.

The reason that I started the repayment plan was simply because I knew that there was a debt, and although the company is not trading (and had not been for over a year), my intention was (and still is) to pay it off from peraonal funds. This remains the case, I just hope that the company now being dissolved does not cause any complications and the plan can carry on as is.

I'll need to convince HMRC that this is all down to my incompetence rather than any dishonesty!

DandelionPatrol

sangie595 wrote: »

You do not have to "trade". - you have to enter into commitments that you know you will not be able to meet.

So you do not have to trade to be trading.

If I believe this, then I would know what I am talking about in the same way that you know what you are talking about ....

persa

SteveABZ wrote: »

This remains the case, I just hope that the company now being dissolved does not cause any complications and the plan can carry on as is.

Well, if the company is dissolved, the record should be shut down. And if the record is shut down, there's no account to allocate your payments against. Case of computer says no.

If you are going to take 12 months to clear this debt, I suspect the company will need to be reinstated. If you are going to take 12 months to clear the debt, there was no way in hell filing for a strike off when you did was a feasible idea.

Think this is starting to sound a bit messy. Fingers crossed you get through to someone helpful, it is rather hit and miss.

fishybusiness

Steve,

Hop over to the UKBusiness forums, Insolvency section, have a look at the Spongebob Plan, should answer your questions.

They are a knowledgeable and helpful bunch over there.

SteveABZ_2

Thanks for all the useful and informative replies once again. I spoke to HMRC - it is a case of company dissolved, file closed, no tax outstanding. Very surprising. According to the chap I spoke to, they were aware of the dissolution application and did not oppose it due to the relatively small amount due.

Now, to me, nearly £4k is not a small amount and I feel morally obliged to pay it personally. But they won't let me, the file is closed and that's that.

I am the first one to rant about tax dodging people and companies, so this does not sit well with me. What a strange situation.

phill99

I had a Ltd Co some years ago that folded as a result of the credit crunch. It owed nearly £8k in Corporation Tax and VAT. I rang them to tell them the company was insolvent. They chased me for a year and I ended up getting a visit from one of their recovery staff (not a debt recovery company but someone employed by HMRC). I explained the situation that there where no debtors, no cash in the bank, no assets and that I was seeking the company to be struck off. He said "You won't hear from us again"

Makkusu

I would ignore the claims of fraudulent trading in this thread, it is HMRC's error if they allowed the company to be struck off without objection.

If HMRC missed that 3 month listing in the London Gazette then the company no longer legally exists and they cannot pursue debt.

I've seen several cases (albeit in error) get dropped just like this one.