Creditors Voluntary Liquidation

[BrilloPad]

Thanks for the reply.

I have owed the money to HMRC around 17k and no funds in the company account as there was no trading. Hence took advice of friends and went for CVL (Creditors voluntary liquidation). After 12 months liquidator asking why you took dividends when there is a CT is due.

I am not doing any trading after company made insolvent.

I have left the country after the company made insolvent and came recently to UK to find a job.

Have HMRC asked for the CT?

[northernladuk]

Unable to get much help from the accountant... as he did a very bad job.. not monitored accounts.. only VAT returns and monthly pay slips.. only worried about year transactions while submitting returns.. not checked in advance.. I am very unlucky to have him..

To be fair sounds fairly normal. They provide a service for you and don't run your business. Unfortunately you are responsible for the day to day running. He should however be there to answer any questions you have for him. If you are not aware of a fundamental rule that dividends can only be taken out of profit in wouldn't rely on an accountant to spot this proactively.

[Kenny@MyAccountantFriend]

It sounds like the funds shown as a dividend should have been used to pay the Corporation Tax liability, as if there was no trading the amount owed to HMRC was from a previous year.

As such the dividend should not have been declared and this may be why the liquidator is picking up on it as the loan would remain outstanding.

Hard to say for certain without seeing the accounts for each year.

[northernladuk]

No. Used dividends to pay the director loan. Then the trading got stopped as the client moved the business to a different country. Hence unable to get funds to pay the CT.

Classic mistake this one. I must know half a dozen contractors that are 100% reliant on the contract they have completing to cover the financial crap they are in. I tired pointing it but none of them listened so f em.

[BrilloPad]

Classic mistake this one. I must know half a dozen contractors that are 100% reliant on the contract they have completing to cover the financial crap they are in. I tired pointing it but none of them listened so f em.

That is not good. HMRC are not known for their tolerance. For me, they are always a priority.

[northernladuk]

Thanks for the reply.

I have owed the money to HMRC around 17k and no funds in the company account as there was no trading. Hence took advice of friends and went for CVL (Creditors voluntary liquidation). After 12 months liquidator asking why you took dividends when there is a CT is due.

I am not doing any trading after company made insolvent.

I have left the country after the company made insolvent and came recently to UK to find a job.

Am I right in thinking you are going to owe HMRC considerably more than that as you've declared and illegal dividend so that will need taxing as well? It wasn't advice from your friends that got you in this situation was it. NEVER take advice from friends on your company finances, particularly when you are as exposed as this. Your friends wouldn't be on another forum regularly mentioned here but isn't mumsnet?

[spec0203]

Have HMRC asked for the CT?

Now liquidator is managing that. I guess Yes.

[northernladuk]

You will have to explain that to them.

I am amazed that HMRC are unaware they are owed money.

Do you have any money to pay HMRC on behalf of the company?

If you can pay them, then "technical breeches" are not such a big deal if disclosed. I did it once myself. I inadvertently "traded while insolvent". Accountant wrote to HMRC. They got their cash. No harm done.

This. I'd be willing to bet HMRC are well aware what is owed and that they've taken reasonable steps to recover it. Bearing in mind there is CT owing as well as personal tax from the illegal dividend I would have thought unless the OP can ring HMRC and pay both these back he hasn't a chance of finding other work Any basic check is gonna uncover all this surely?

[spec0203]

This. I'd be willing to bet HMRC are well aware what is owed and that they've taken reasonable steps to recover it. Bearing in mind there is CT owing as well as personal tax from the illegal dividend I would have thought unless the OP can ring HMRC and pay both these back he hasn't a chance of finding other work Any basic check is gonna uncover all this surely?

Can I know what do you mean by OP?

[spec0203]

This. I'd be willing to bet HMRC are well aware what is owed and that they've taken reasonable steps to recover it. Bearing in mind there is CT owing as well as personal tax from the illegal dividend I would have thought unless the OP can ring HMRC and pay both these back he hasn't a chance of finding other work Any basic check is gonna uncover all this surely?

Thank you for your response. Yes. HMRC lodged claim for CT.