Creditors Voluntary Liquidation

[TheFaQQer]

Sorry the company owes HMRC the money.

The company is insolvent

He could be struck off and liable for Directors loan, that's pretty much it

Unless negligent, in which case HMRC can go after the directors for acting illegally.

[BrilloPad]

Unless negligent, in which case HMRC can go after the directors for acting illegally.

Agreed. And is what I think will happen if the OP does not pay up. Ignorance is not an excuse. Being a company director is supposed to be a serious matter.

[MercladUK]

Agreed. And is what I think will happen if the OP does not pay up. Ignorance is not an excuse. Being a company director is supposed to be a serious matter.

CT is a company tax, not a personal tax.
Directors Loan and/or Illegal dividend payments are different.

You stated he will have to pay CT over 3 years, this is incorrect. The company pays CT and it is insolvent.

[meridian]

CT is a company tax, not a personal tax.
Directors Loan and/or Illegal dividend payments are different.

You stated he will have to pay CT over 3 years, this is incorrect. The company pays CT and it is insolvent.

The company is insolvent because dividends in excess of available reserves were taken. If these illegal dividends are reversed, then the directors owe the company money, and the liquidators can chase the directors to repay enough money to the company to repay the tax debt.

[BrilloPad]

CT is a company tax, not a personal tax.
Directors Loan and/or Illegal dividend payments are different.

You stated he will have to pay CT over 3 years, this is incorrect. The company pays CT and it is insolvent.

The company is insolvent because dividends in excess of available reserves were taken. If these illegal dividends are reversed, then the directors owe the company money, and the liquidators can chase the directors to repay enough money to the company to repay the tax debt.

What Meridian Said.

To be fair, you have to read several posts before you get the full story.

[MercladUK]

The company is insolvent because dividends in excess of available reserves were taken. If these illegal dividends are reversed, then the directors owe the company money, and the liquidators can chase the directors to repay enough money to the company to repay the tax debt.

They can chase the director for the illegal divis and/or the directors loan if the liquidators can prove this to be the case.

They CANNOT chase for CT (where the recovery of said funds may or may not cover the COMPANIES exposure to HMRC)

[Scruff]

http://www.realbusinessrescue.co.uk/...sponsibilities

[meridian]

Creditors Voluntary Liquidation

They can chase the director for the illegal divis and/or the directors loan if the liquidators can prove this to be the case.

They CANNOT chase for CT (where the recovery of said funds may or may not cover the COMPANIES exposure to HMRC)

I agree, that's why I said "repay money to the company", so the company can repay the CT. Separate legal entities.

Where the OP has gone wrong imo (apart from paying illegal dividends) is in getting a liquidator involved. Depending on how aggressive they are they may chase him, or they may drop it.

OP, have a look here:
http://www.ukbusinessforums.co.uk/th...liable.252282/

[BrilloPad]

They can chase the director for the illegal divis and/or the directors loan if the liquidators can prove this to be the case.

They CANNOT chase for CT (where the recovery of said funds may or may not cover the COMPANIES exposure to HMRC)

Excellent news! I am going to take all my money in the company as dividends - then go into liquidation and forget the CT. I did not know this was possible. Cheers

[SimonMac]

Excellent news! I am going to take all my money in the company as dividends - then go into liquidation and forget the CT. I did not know this was possible. Cheers

But if you don't have teh CT to cover the dividends they will be declared illegal