No income company director

joncharles

I am the sole director of my limited company. Trading has ceased altogether due to the coronavirus. Personally I now have no income and am entitled to nothing from the government.  I have just recently successfully applied for universal credit. My company is due to pay c. £10k in corporation tax on 1st Jan. It is unlikely that it will have the means to do that given the present circumstances. With great humility I ask what my options may be. 

mwarby

You’d need to put your company in liquidation administration/cva(company voluntary arrangement, like an IVA but for the company) (if the business is worth saving).The corporation tax debt would die with the corporate insolvency

if you have personal guarantees for other business debt these will likely be called in, if you can’t pay them you’ll need to consider personal insolvency, which option you pick will depend on what assets you have, and how much debt and income you have

i suggest you talk to business debt line

Minkym00

Both administration and CVA look pretty unlikely as the company is not trading. 

mwarby

I dunno many won’t be trading due to corona virus, it depends on how able the company is to trade when it’s over.

is this a company (like a shop or a trade) or is this a personal service company, ie for contracting, if the latter cva or administration make no sense as the companies are buying you not access to any other assets the business has like IP

joncharles

Personal service.. optometry locum work. There is a chance it will trade again but it all depends on how long the crisis goes on for. Personally i can cover living costs for about 3 months but beyond that with no income things begin to look very iffy. 

mwarby

You’ll maybe be run off your feet in a months time, think of all the eye tests which have been missed and those wanting prescription sunspecs

it sounds like liquidation maybe the way to go, but I’d try to avoid it (to be fair you’ve avoided tax through corporation tax, to avoid that tax bill by insolvency will get HMRCs back up no doubt)

silvercar

Company directors can use the furlough scheme, even if they are tiny companies with only one director. The company would be entitled to 80% of your wage plus the employers NI contributions and pension contributions on that money. Even if you only paid yourself £720 a month from the company as PAYE and the remainder as dividends, you would get 80% of that so £576 a month. Supplement with UC if you are eligible. Then hold tight until this is over.