Company Secretary - Problem

jst8

Hello everyone,

I just recieved a letter form HM Revenue and Customs saying as I was a company secretary of a Limited Company I am responsible for some 20k of unpaid tax!

I am completely shocked.

I am now living oveseas and have done for almost two years I have no intention of going back to the UK to fight this any ideas what I do next.

Thanks
JST

pania

JST thats shocking! i thought it was directors that were liable. in what capacity were you employed by the company? did you receive a share of the dividends at year end or were you employed under a standard contract? i'd call the HMRC from a witheld number and ask them for the legalities surrounding this. If you weren't responsible for the day to day running of the business and any financial decisions then i can't see that you would be liable. it may be a misunderstanding. it may be a serious issue that you need to confront, not necessarily by returning home but from where you are. hope that helps a little sorry i don't have more information for you.

tallyhoh

My understanding that as Company Secretary you are/were responsible for ensuring tax is paid etc.

Have a good look at the HMRC site. It should give you some direction before you call them.

Please dont just ignore the letter. It could lead to all sorts of problems.

cazziebo

Duties as an Officer of the Company
The Companies Act 1985 imposes numerous obligations on companies regarding, the conduct of their affairs. Most of these requirements are backed up by criminal sanctions so that, in the event of a breach, the company and every officer of it who is in default is liable to a fine and, in some cases, imprisonment. As an officer of the company(Section 744 of the Companies Act 1985), the Company Secretary can be prosecuted for most of these offences, and these potential liabilities form the basis of what we have defined in this document as the core duties.

don't want to scare you but this could get serious. Can you check with companies house to check you were listed as Co Sec at the time the tax was due? Do you have a copy of your resignation letter?

I worked in a company where our VAT return was late and it was the Co Sec who took the rap for it.

tyllwyd

I agree with the others - you need some legal advice from a solicitor who understands UK company law.

jst8

Thanks for the responses so far........ it looks very bad for me then I dont have this money and have no access to a UK solicitor so will I be prosecuted in my absence? My last relative died last year that is why I left the UK and dont intend to go back.

What a nightmare this is turning into!

chevalier

What about the other company directors? Are you in contact with them? I would think that the date you left would be important as to whether you are liable for the tax. Did you make sure when you left that you were removed as company secretary from the company's house records?

Not sure where you are living, but maybe there is someone out there who know GB law and could help?

chev

Bean_Counter

jst8 wrote: »

I just recieved a letter form HM Revenue and Customs saying as I was a company secretary of a Limited Company I am responsible for some 20k of unpaid tax!

I agree with the other posters about liability.

However, are you sure that the £20K is actually due? Could it be that it is an estimated bill from HMRC? Is the company still trading?

rog2

jst8 wrote: »

Thanks for the responses so far........ it looks very bad for me then I dont have this money and have no access to a UK solicitor so will I be prosecuted in my absence? My last relative died last year that is why I left the UK and dont intend to go back.

What a nightmare this is turning into!

HMRC are, unfortunately, not the most forgiving of creditors - they are, in my own experience, totally inflexible in their attitude towards 'tax debts', whether actual or 'assumed'.

Whilst this 'alleged debt' could be seen as 'criminal', under Section 744 of the Companies Act 1985, I am of the opinion that if HMRC are chasing you, personally, for this debt, they are most likely to deal with it through civil rather than criminal proceedures.

I think that they will, in the first instance, initiate County Court Proceedings against you, which, if uncontested, will result in a CCJ. If the CCJ is not paid within one month, they will, then, most likely attempt to serve you with a Statutory Demand (the pre-cursor to Bankruptcy).
As you are not resident in the UK, they will be unable to serve this personally, although they will make two attempts to serve it to your last known UK address, and they will post it, thereby 'deeming to have served it'.
The Statutory Demand is, basically, a final attempt to make you pay - it gives you 18 day in which to try to come to an arrangement to pay, with their Solicitors (who will be named on the SD). Again, in my own experience, I found the 'solicitor' to be totally inflexible - refusing to listen to any reasoning since a CCJ had been issued and that their only concern was with collection.
If you fail to pay, or (and against the odds) come to an arrangement with their solicitor, then the next, and most likely, stage is that HMRC will 'petition for your Bankruptcy in the High Court'.
The Bankruptcy 'hearing' may be heard in your absence, and, again, the judge will not e concerned with the 'minutiae' of the case - sufficient for HMRC to have obtained a CCJ, against which you will have been judged to have 'defaulted' and that they have 'been through the legal motions' of issuing a Statutory Demand and subsequent petition for your bankruptcy. The judge will simply make a 'Declaration of Bankruptcy'.
So what will all this mean for you, jst?
Quite simply the answer is - not a lot.
You have said that you live outside of the UK and that you have no wish to return to the UK. Normally 'Bankruptcy' will last for a period of 12 months, after which time the 'bankrupt' will recieve an automatic discharge - although many would be discharged early, often after six months or less. If there is a suspicion of 'criminal intent' or 'fraud' then the 'Bankruptcy Period' can be extended, by the imposition of a Bankruptcy Restriction Order, for an additional period of up to five years.
In the case of a 'bankrupt' not responding, usually because that person is not living in the UK, then the 'Bankruptcy Period' can be 'indeterminate'. This means that the 'bankrupt' will have to answer to the OR on his/her return to the UK.
Any assetts, that the bankrupt may have, in the UK, could be siezed by the OR.
UK Bankruptcy, and the restrictions of bankruptcy, are 'civil' and not 'criminal' matters - they have no jurisdiction outside of the UK and the Restrictions that are placed on a bankrupt are ONLY applicable in the UK.

HMRC are, by far, the biggest single 'petitioner' for bankruptcies, in the UK. Once they embark upon that route, there is very little, other than paying what is often 'assessed' rather than 'actual' debt, to stop the process. It does, however, mean that ALL UK debt is 'wiped off' of your record at the time of the bankruptcy declaration, and HMRC can put a convenient little tick in their file before they consign it to the depths of 'history'.

Obviously, you must choose what you wish to do, jst. I can only relate my own experiences as a 'Statistic of the HMRC Bankruptcy Machine' and I hope that it will reassure you that your position is not 'the end of the world'.

I can, also, reccomend the following link, to a charity that specialises in dealing with Business problems, including Tax (Both Income Tax and VAT):

Business Debtline - http://www.bdl.org.uk - tel (uk) 0800 197 6026

Good luck.

jst8

Thanks very much for all contributions.

Not sure if I am better or worse now.

I will need to sit ina quiet place and read this demand again but I really do wonder about my future I have been getting on very well recently and then this.

Not really sure if I should carry on with anything I mean whats the point I worked since I was 14 and still cannot get

Bismarck

Bean_Counter wrote: »

I agree with the other posters about liability.

However, are you sure that the £20K is actually due? Could it be that it is an estimated bill from HMRC? Is the company still trading?

What do you actually know/remember about said company?

If you'd been secretary while it generated about 80K of profit and perhaps a 300K turnover, it must leave some kind of trace....

I know this must have come out of the blue but there's a lot more to this or HMRC have got some seriously crossed wires...suspect you need an accountant and the relevant accounts rather than a lawyer.

good luck!