Limited Company Closure (DS01) - Corporation Tax still owed

hodd

I found this three-year-old thread in this section of the forum:

https://forums.moneysavingexpert.com/discussion/5355068/ltd-co-dissolved-still-owing-corporation-tax&highlight=ds01

I’m in exactly the same position. I have a limited company which wasn’t doing well, so I became a normal employee instead. Now I’m coming to close (strike off) the company, I realise I own about £8000 in corporation tax. I know this is very poor planning on my part. I’ve had the tellings off from my accountant, etc.

I don’t have £8000 right now, but I’m earning reasonably well so can have this amount by around mid-November. Apparently, if I contact HMRC to say this, they’ll just ask for the cash now. Fair enough, it’s their money. My accountant and the Business Debtline have both advised me to strike off the company. One of two things will then happen:

A) HMRC do not object or consider £8000 to be too small an amount to warrant chasing. The company goes and so does the tax bill.

HMRC object and chase me for the money.

In the previous thread I linked to above, the poster ended up with option (A). If I get option (B), by that time I’ll have the cash and pay up.

I’m just wondering if anyone else has been unfortunate/foolish enough recently to go down this not stress-free route? As I say, it’s not big or clever, and I’m relieved I’ll have the cash to pay up or things could get nasty.

so_very_confused

Happened to me. Became ill thought I would recover therefore used money for living expenses. Unfortunately long term sickness and then lower paid job.
My accountant advised the same, never heard anymore. When i checked register business had been struck off.
Worst that can happen OR becomes involved. My accountant told me he was a human being unlike HMRC!

hodd

Thanks for the reply. Health is wealth (cliche alert) so I hope you’re OK now?

When the letters start to come - and it sounds like they’ll be scary - I’ll get back to my accountant and Business Debtline. I was advised to offer nothing until it gets nasty. What were HMRC’s letters like?

Brynsam

hodd wrote: »

I have a limited company which wasn’t doing well, so I became a normal employee instead. Now I’m coming to close (strike off) the company, I realise I own about £8000 in corporation tax.

I don’t have £8000 right now, but I’m earning reasonably well so can have this amount by around mid-November.

Mid-November is only just over 2 weeks away. Could you not delay strike off until then? Even if you can't, do you really think HMRC are going to get pro-actively aggressive because tax is a week or two later than they might have wanted it?

hodd

Time flies. Maybe make that early December until I have the cash.

The tax return has just been filed. HMRC are likely to start sending letters within two weeks requesting payment. As I’ve no funds left in the business, and it’s effectively not trading anyway, they won’t entertain the idea of a payment plan and will just ask for the money now. The DS01 (the company needs to close anyway) is more of a delaying tactic whilst I gather the funds. If they don’t chase the £8K (and I’m not banking on this), that’s a lucky break albeit a slightly unscrupulous one.

phill99

If the business has no assets, no cash is bank and has no debtors, it would be very difficult for HMRC to get anything out of you.


You need to try and understand that the money that your Company owes HMRC is nothing to do with your employment now.


I was in a situation in 2008 with my old Ltd Co. I owed about £6k in Corporation Tax. The Company was insolvent, had no assets and no cash. A man from HMRC actually knocked on my door to discuss it. When I explained the situation, he just said " OK, You won't hear from us again". And then the company was struck off a while later.

so_very_confused

phill99 wrote: »

If the business has no assets, no cash is bank and has no debtors, it would be very difficult for HMRC to get anything out of you.


You need to try and understand that the money that your Company owes HMRC is nothing to do with your employment now.


I was in a situation in 2008 with my old Ltd Co. I owed about £6k in Corporation Tax. The Company was insolvent, had no assets and no cash. A man from HMRC actually knocked on my door to discuss it. When I explained the situation, he just said " OK, You won't hear from us again". And then the company was struck off a while later.

That's what my accountant told me and he was right.
He also told me to bin the letters as that is what everyone else does including him, he then said if they are causing you stress send them to me and I will bin them!
I wasn't chased, lie low and see what happens.

so_very_confused

Brynsam wrote: »

Mid-November is only just over 2 weeks away. Could you not delay strike off until then? Even if you can't, do you really think HMRC are going to get pro-actively aggressive because tax is a week or two later than they might have wanted it?

I would not delay strike off. Do it now HMRC may not notice. Mine was quietly struck off, what a relief!

hodd

Ha ha, we’ll see. The Debtline’s thinking was HMRC may object to a strike off if there is an unknown amount of tax owing due to no tax return being filed. I might owe a sizeable amount for all they know, in which case they’d certainly think it worthwhile to chase. But £8000 might not be worth chasing if they think I’m not going to pay.

hodd

phill99 wrote: »

If the business has no assets, no cash is bank and has no debtors, it would be very difficult for HMRC to get anything out of you.


You need to try and understand that the money that your Company owes HMRC is nothing to do with your employment now.


I was in a situation in 2008 with my old Ltd Co. I owed about £6k in Corporation Tax. The Company was insolvent, had no assets and no cash. A man from HMRC actually knocked on my door to discuss it. When I explained the situation, he just said " OK, You won't hear from us again". And then the company was struck off a while later.

Thanks. I understand it’s not my money. That’s why even if a bailiff turned up at my house, there’d be nothing to take as the business has no assets. The advice from the Business Debtline is to pay up if things get nasty, e.g. if they decided my conduct as a director was inappropriate. It’s prudent I think to have that £8K standing by just in case.

phill99

hodd wrote: »

Thanks. I understand it’s not my money. That’s why even if a bailiff turned up at my house, there’d be nothing to take as the business has no assets. The advice from the Business Debtline is to pay up if things get nasty, e.g. if they decided my conduct as a director was inappropriate. It’s prudent I think to have that £8K standing by just in case.

They are talking sh$te.


HMRC have to prove that your conduct was inappropriate.