What to do, frankly.

pleasedelete

Sounds like the company may have been run illegally. Are you at risk of being struck off and barred from being a director?

It is a limited company- so your liability is limited however you have paid company funds to yourself (through a directors loan and/or dividend payments) without paying creditors- HMRC. The company owe HMRC the corporation tax- not you.

Might be time to look for a salaried role? Let the company fold and accept that the company will be struck off etc.

You must have things that you can sell? Everything except beds and cooker? So clothes, bikes, kitchen stuff, jewellery, luggage, toys, computers, phone, sunglasses etc etc

andyfromotley

Yikes, didnt pay HMRC but took a directors loan??!! They will have you have no doubt detected take a very dim view of this. Bite the bullet, contact them and see what you can try to sort out.

The long term view is much more complex. Is this busimess really sustainable? it hasnt been so far and yes ultimately your house will be at risk.

I'veGotBills

Not being struck off, not illegal.

pleasedelete

Are you sure?

You have an overdrawn loan account an you cant pat the corporation tax due. HMRC may pursue you individually after the winding up of the company. They may apply to have the company wound up. Closing the company voluntarily will not end the situation but it may delay it- voluntary liquidation is better than forced,

I'veGotBills

I came on here tonight to have a quick look and it made me furious. I decided not to respond but now I am going to anyway.

Firstly, I have been around long enough to know that people in debt, certainly when it comes from over-consumption, are like gamblers or alcoholics. The last thing we need are "oh, you have been a naughty boy". That does not work and just makes us even more likely to "reoffend". Yes, it is like an addiction as I am sure many here will know.

I am not going to tell the world what I spend on this and that but suffice to say that I have gone through my numbers over and over and I know full well that bar a few items, I don't spend more than anyone else. I have had a look at a few SoA on here too. The only thing I do is that spend a bit more than most on phone and broadband, but that is because I work from home and need fast, good broadband. The main reason my monthly spending is because I have six under-aged kids and spend nearly £2400 pcm on debt including two cars and a mortgage of which the mortgage is less than £500 pcm. This is why I have spent the company's money when I should not have, I try to keep up with my creditors and try to give my kids a relatively normal childhood.

On my earnings, our net earnings from the business AFTER paying the correct amount of CT is the equivalent of 82k pa for someone on PAYE. I will most certainly not go back to being a salaried employee. Been there, done that. Stuck in traffic, endless meetings and peanuts for pay. No thanks.

I could get rid of a car, I could but as the debt on that one is 4.5k and it is worth may be 2k, I'd just end up with more debt due yesterday.

All our clothes are from eBay. Trust me, we have nothing worth selling bar possibly a few items of a very high sentimental value.

On the running "the company illegally" and "it is not sustainable" issue. I have a qualified accountant doing my books, all is above board. The company's profits are considerable and the company is very sustainable. This year, I have grown the business 40% and the net profit is 60%.

The simple truth is, I have been an idiot and now I have face the music.

I'veGotBills

Well, pleasedelete, time will tell, I suppose, what HMRC does. If they have a brain, they will let me trade and pay off the debt. I'll let you know.

pleasedelete

If you don't have the money in the business to pay the corporation tax and you have a £10k business loan loan the business has issues. By the time you pay corporation tax it is 9 months after the year end. By that time you should also have almost all of the next years corporation tax in hand but you owe 1 year corp tax, have a business overdraft loan, an outstanding directors loan account (on which corp tax may also be due if not repaid) and you don't have this years tax in hand (as if you did you could use it now).

Having 6 children is a private issue- not linked the business.

I actually think this is a wind up as very similar to a thread on mumsnet but from the 'wife' where they also took their ball home when people said things they didn't want to hear.

patman99

If you are running your company at a nice profit and are growing it year on year, then I can see no harm in offering to pay the CT in installments that would enable the business to continue to grow and prosper.

As you have 6 children, you might be better off looking at adjusting your income from the business to a point were you can claim Working and Child Tax Credit. You may well get more than you would by taking the salary you are currently taking.

Anyway, talk to Business debtline about your business debts and Stepchange (or similar) about your personnal ones.
There is a light at the end of the tunnel. However, the tunnel might be just about long-enough to stop you from seeing it (yet).

I'veGotBills

pleasedelete, I know all this. You have not said anything I don't want to hear, I just don't think it is very constructive.

andyfromotley

Hi IGB,

sorry if the responses have upset you. The question is how do you square the circle of your expenditure not being enough to meet your outgoings. I accept that you will run and grow your business to the max and from what you say it is certainly producing more than a salaried position (depending upon your line of work).

So really that only leaves your expenditure to be cut. If you post an SOA people can suggest savings even an emergency budget just to get you out of the hole. Unfortunately as you know HMRC are just about the worst creditors to have, so something has to give to get this sorted.

Carrying on the same way will only work if you keep growth at really high numbers and stave off your creditors long enough to reap the benefits. I understand this is a really difficult time for you but the vast majority of people on here are supportive and here to help. Dont be so quick to give up on it.