Closing Ltd - strike off liquidation etc advice

[VanGTO]

Hi all, guaranteed that i'll get flamed for this but i have a bit of a dilemma.

To cut a long story short... I was a contractor, for a year and my rate covered cost of living. There is nothing left in the tank (or bank) so to speak. I'm not operating anymore and am back on a payroll... again salary meets cost of living pm.

Now i have been a bit foolish and put my head in the sand with HMRC and companies house.

I am getting hit with late notices and penalties from hmrc. I really wasn't ready for contracting/running own business at a young age.

So i guess what i am trying to ask is what is my best option here and what are the ramifications... am i going to be made bankrupt because i can't pay corp tax etc??

Sorry to ask here but i can't afford to pay for an accountant and i am sure there are some very learned among you with regard to financials etc.

Kind regards,

Van "bricking it" GTO

[stek]

You will need an accountant I'm afraid, All the time it's not sorted more penalties and interest are accruing. Once that's done agree a repayment schedule with HMRC and stick to it.

If you don't they will look for you, they will find you, and they will kill you. Well, bankrupt you.

[TheFaQQer]

I really wasn't ready for contracting/running own business at a young age.

Karen Brady was running Birmingham City FC at 21 (as she kept reminding viewers of The Apprentice one year)

So i guess what i am trying to ask is what is my best option here and what are the ramifications... am i going to be made bankrupt because i can't pay corp tax etc??

Sorry to ask here but i can't afford to pay for an accountant and i am sure there are some very learned among you with regard to financials etc.

Save up and get professional help. Sticking your head in the sand has got you nowhere so far, apart from an increase in penalties and fines. Work out what you owe and then work out how you are going to pay HMRC. Where did the money go? Corporation tax is only due on the profits, so if you made a profit then the money must have gone somewhere. If you've paid it out as a dividend then you might be in trouble. If you paid it out as salary, did you pay tax and NI on it? If you've taken it as a loan then that loan will need to be called in to cover the debts to HMRC.

You're going to need the advice from a professional who knows what they are doing and can help limit the size of the hole in which you find yourself. Trying to cobble together advice from forum posters isn't going to help you - so spend some of your permie salary on putting your business right.

[pwep]

beware of some "accountants"

I joined Brookson and took one of their LTD companies in 2004 (yes, two thousand four). I have been with them since then until I decided to close the company in January 2015. I just want to warn people how hard work Brookson are. Getting real world answers out of them is impossible. I appreciate it takes some time to process the close down of a LTD but it is now in month 7 (seven !) and still only trickling along. I am very dissatisfied. So going to a so called accountant is not an easy option. My impression is that they have you by the proverbials and they just keep going with incompetence after incompetence (by the way one has to pay up front).
To add insult to injury HMRC start investigating (I assume its because am closing down) and surprise surprise one gets nice little emails from Brookson saying "apologies but you owe more tax, sorry for the inconvenience", but "HMRC calculations do not match ours" so get your bank account ready for stripping.
Before 2004 I ran my LTD company for 4 years and used a one man band accountant for tax returns etc etc no problems but it became time consuming etc I decided to go with so called "big boy accountants/ IR35 scare tactics". Ever since I haven't had a year when I didn't find errors by them in the so called draft accounts. Funny that nearly every time they agreed with me when I was paying them!
My recommendation is go with smaller-the-better-accountants, not so many idiots screwing up your accounts. You'll need good luck too.

[sam2015]

I joined Brookson and took one of their LTD companies in 2004 (yes, two thousand four). I have been with them since then until I decided to close the company in January 2015. I just want to warn people how hard work Brookson are. Getting real world answers out of them is impossible. I appreciate it takes some time to process the close down of a LTD but it is now in month 7 (seven !) and still only trickling along. I am very dissatisfied. So going to a so called accountant is not an easy option. My impression is that they have you by the proverbials and they just keep going with incompetence after incompetence (by the way one has to pay up front).
To add insult to injury HMRC start investigating (I assume its because am closing down) and surprise surprise one gets nice little emails from Brookson saying "apologies but you owe more tax, sorry for the inconvenience", but "HMRC calculations do not match ours" so get your bank account ready for stripping.
Before 2004 I ran my LTD company for 4 years and used a one man band accountant for tax returns etc etc no problems but it became time consuming etc I decided to go with so called "big boy accountants/ IR35 scare tactics". Ever since I haven't had a year when I didn't find errors by them in the so called draft accounts. Funny that nearly every time they agreed with me when I was paying them! My recommendation is go with smaller-the-better-accountants, not so many idiots screwing up your accounts. You'll need good luck too.

Your post literally sends chills down my spine. I joined Brooksons over a year ago. After a few months of the most awful service I decided to leave on the basis that they would complete my accounts. Leaving was the best decision I made, my mistake was allowing them to do my accounts for that tax year (i.e. file my annual accounts and corp tax). Well over a year later the HMRC starts sending me penalities for late corporation tax filing. In complete shock I track this back to Brooksons who held their hands up and said they forgot to file it. They filed a part of it (corp tax but not the annual accounts). I nearly had a breakdown as they did actually tell me how much i had to pay as per the draft accounts (which by the way was shockingly high and probably incorrect but in favour of the HMRC) but they just didn't file the annual accounts. I remember I kept asking for the final documents and would get brushed off with my enquiries are being looked into. Note also, quite funny thinking of it now re the corporation tax amount, it was so high I asked for a second opinion, with the help of this advisor I managed to get Brookson's to shave nearly 3k off the corp tax bill that was paid before the deadline. Friends and fellow contractors - really just Avoid Brookson's.

The HMRC advisor who explained the penalty situation to me when I called advised me to get the paperwork filed asap before they make a determination of the tax owed and that their determination amount was the final judgement. The liability for fines like these lies with you regardless of what your accountant has done. I have never known such an organisation as this. I saw a post on the forum that advised to contact the MD of Brooksons for issues like this as the customer service department are slow (give them a month or two for a response which you then have to chase). The MD has been really good at admitting the companies faults, but it does not take away the stress and frustration at having to deal with a company that charges £150 a month for a call centre accountancy practice that will more than often get a little something wrong.

The MD has admitted everything, to cover the resulting fines and 1 months compensation if i don't file a deadlock letter or go to the ICAEW. It just makes you wonder doesnt it.

My advise to anyone here is just to stay away from the big accountancy firms, try not to switch too much. Ensure your accountancy firm offer you an account manager and work with your accountants, be proactive in asking them questions. There are some really good accountants out there and believe me they stand out when it comes to companies like this one.