Bona Vacantia Reclaiming VAT

Dunree

Hi folks,

Apologies if this is posted in the wrong place but I can't see anywhere else it may fit.

If it should be elsewhere, then please move it accordingly

We gave up our pub business in January this year. We then applied to have the company struck off as it was no longer needed.

One of our accountants advised us to close all bank accounts down and remove any monies from them.

Unbeknown to him his colleague had applied for a VAT refund and this was granted during the strike off period. They overlapped.

This refund amounts to just under £2000, which, under current climate, would mean a lot to us.

I wrote to the VAT people in June and advised them of the bank account closure and asked them to put it into my personal bank account.

Because of the length of time it takes for them to process documents these days, any time I called up I was advised to call back after the 5th of August, which I duly did.

This is where I found out that the VAT people had allocated our refund to Bona Vacantia without telling us, even though they have all of our contact details.

So far this week I have spent around four hours trying to talk to various departments and getting nowhere.

I have asked the VAT people to reverse the decision to go down the BV route, as we were not notified of it, and I'm currently awaiting a call back from them, scheduled for Friday.

The BV people have told us it is currently taking four months to even look at any correspondence and that we have to apply for a ''Discretionary Grant'', which is not guaranteed, to get our money back. And if it is granted there is a charge of £300 plus a retainer of 5% of any total!!!

The BV people haven't received the money yet from the VAT people, and, apparently, it can take several months before they get it.

I'm looking for advice as to how to approach the government departments concerned but I'm not sure where we stand legally.

Any help would be very gratefully appreciated

elsien

What do your accountants advise given this seems to be the result of their failing to communicate with each other? Shouldn’t they be chasing it for you? 

Dunree

elsien said:

What do your accountants advise given this seems to be the result of their failing to communicate with each other? Shouldn’t they be chasing it for you? 

Hi Elsien,

It seems not.

I have emailed them but, for the first time, they haven't been that helpful.

I've had to do it all so far.

ps, I’ll deal with the accountants separately when I can get some info 😊

user1977

Can't you reinstate the company?

TripleH

Are you entitled to the VAT refund?

If the VAT registration was in the company's name and not yours, why do you get the VAT refund?

Having said that why your accounts wound up the company when there was a VAT refund, I don't know. It took 6 months (I think?) from submitting the form to the company being struck off last time I did it.

Dunree

user1977 said:

Can't you reinstate the company?

TripleH said:

Are you entitled to the VAT refund?

If the VAT registration was in the company's name and not yours, why do you get the VAT refund?

Having said that why your accounts wound up the company when there was a VAT refund, I don't know. It took 6 months (I think?) from submitting the form to the company being struck off last time I did it.

We can reinstate the company on a temporary basis but it apparently requires a court order, and even then, there is no guarantee we will get the refund. 

The £300 plus the 5% still applies. 

The company was entitled to the refund and we were the only shareholders so, I may be wrong, but I’m assuming that we get the refund and not the crown. 

There was a miscommunication between the two directors. The one who told us to wind everything up didn’t realise that the other director had applied for the refund. 

It only took around three months for the company to be struck off. 

user1977

Dunree said:

user1977 said:

Can't you reinstate the company?

TripleH said:

Are you entitled to the VAT refund?

If the VAT registration was in the company's name and not yours, why do you get the VAT refund?

Having said that why your accounts wound up the company when there was a VAT refund, I don't know. It took 6 months (I think?) from submitting the form to the company being struck off last time I did it.

The company was entitled to the refund and we were the only shareholders so, I may be wrong, but I’m assuming that we get the refund and not the crown. 

I assume you're wrong, otherwise there'd be no point in the bona vacantia system and people could just rock up on the basis they used to be the shareholders and claim whatever assets have been uncovered.

Dunree

user1977 said:

Dunree said:

user1977 said:

Can't you reinstate the company?

TripleH said:

Are you entitled to the VAT refund?

If the VAT registration was in the company's name and not yours, why do you get the VAT refund?

Having said that why your accounts wound up the company when there was a VAT refund, I don't know. It took 6 months (I think?) from submitting the form to the company being struck off last time I did it.

The company was entitled to the refund and we were the only shareholders so, I may be wrong, but I’m assuming that we get the refund and not the crown. 

I assume you're wrong, otherwise there'd be no point in the bona vacantia system and people could just rock up on the basis they used to be the shareholders and claim whatever assets have been uncovered.

Sorry, I should have said directors as well. 

It was our company. We set it up specifically for the pub business. 

When we no longer had the pub that’s when we went through the strike off process. 

user1977

Dunree said:

user1977 said:

Dunree said:

user1977 said:

Can't you reinstate the company?

TripleH said:

Are you entitled to the VAT refund?

If the VAT registration was in the company's name and not yours, why do you get the VAT refund?

Having said that why your accounts wound up the company when there was a VAT refund, I don't know. It took 6 months (I think?) from submitting the form to the company being struck off last time I did it.

The company was entitled to the refund and we were the only shareholders so, I may be wrong, but I’m assuming that we get the refund and not the crown. 

I assume you're wrong, otherwise there'd be no point in the bona vacantia system and people could just rock up on the basis they used to be the shareholders and claim whatever assets have been uncovered.

Sorry, I should have said directors as well. 

It was our company. We set it up specifically for the pub business. 

When we no longer had the pub that’s when we went through the strike off process. 

I don't see that makes a difference.

The discretionary grant procedure seems to be the correct one here.

Dunree

user1977 said:

Dunree said:

user1977 said:

Dunree said:

user1977 said:

Can't you reinstate the company?

TripleH said:

Are you entitled to the VAT refund?

If the VAT registration was in the company's name and not yours, why do you get the VAT refund?

Having said that why your accounts wound up the company when there was a VAT refund, I don't know. It took 6 months (I think?) from submitting the form to the company being struck off last time I did it.

The company was entitled to the refund and we were the only shareholders so, I may be wrong, but I’m assuming that we get the refund and not the crown. 

I assume you're wrong, otherwise there'd be no point in the bona vacantia system and people could just rock up on the basis they used to be the shareholders and claim whatever assets have been uncovered.

Sorry, I should have said directors as well. 

It was our company. We set it up specifically for the pub business. 

When we no longer had the pub that’s when we went through the strike off process. 

I don't see that makes a difference.

The discretionary grant procedure seems to be the correct one here.

Even though HMRC didn’t give us a chance to reclaim it?

They had all our contact details but they went to BV instead. 

As I said in an earlier post, any help is appreciated. 

With regards to the 5% retainer. All of our company debts were paid off before we dissolved it. We didn’t short change anyone and our accountants can verify this, so, if we were to get the grant, would we still have to pay this?

user1977

Dunree said:

user1977 said:

Dunree said:

user1977 said:

Dunree said:

user1977 said:

Can't you reinstate the company?

TripleH said:

Are you entitled to the VAT refund?

If the VAT registration was in the company's name and not yours, why do you get the VAT refund?

Having said that why your accounts wound up the company when there was a VAT refund, I don't know. It took 6 months (I think?) from submitting the form to the company being struck off last time I did it.

The company was entitled to the refund and we were the only shareholders so, I may be wrong, but I’m assuming that we get the refund and not the crown. 

I assume you're wrong, otherwise there'd be no point in the bona vacantia system and people could just rock up on the basis they used to be the shareholders and claim whatever assets have been uncovered.

Sorry, I should have said directors as well. 

It was our company. We set it up specifically for the pub business. 

When we no longer had the pub that’s when we went through the strike off process. 

I don't see that makes a difference.

The discretionary grant procedure seems to be the correct one here.

Even though HMRC didn’t give us a chance to reclaim it?

They had all our contact details but they went to BV instead.

It's the company's money. So it goes to the company, or if the company's dissolved, it goes to BV. Having contact details of the people who used to be shareholders or directors simply isn't relevant - it isn't their money.

With regards to the 5% retainer. All of our company debts were paid off before we dissolved it. We didn’t short change anyone and our accountants can verify this, so, if we were to get the grant, would we still have to pay this?

I don't see why not. The BV people don't just take the word of you or your accountants. They're taking on a risk, so it's not unreasonable for them to be paid for that.