Advice needed urgently

**mudskipper** · 29 July 2015, 06:42

Originally posted by S45YTH View Post

He still won't contact the accountant so I am taking charge.

Assuming this is for a friend, if he doesn't want your help and is still burying his head in the sand, you're going to get nowhere. Creditors will not talk to you, the banks will not talk to you, his accountant should not talk to you. He needs to man up and talk to his accountant, and that's the only advice you can really give him.

If at 2K a week he was living beyond his means, he needs to look carefully at his lifestyle.

You can check https://beta.companieshouse.gov.uk/ and see what, if any, accounts were submitted.

**DaveB** · 29 July 2015, 06:50

Originally posted by mudskipper View Post

Assuming this is for a friend, if he doesn't want your help and is still burying his head in the sand, you're going to get nowhere. Creditors will not talk to you, the banks will not talk to you, his accountant should not talk to you. He needs to man up and talk to his accountant, and that's the only advice you can really give him.

If at 2K a week he was living beyond his means, he needs to look carefully at his lifestyle.

You can check https://beta.companieshouse.gov.uk/ and see what, if any, accounts were submitted.

This +1. Only he can talk to the relevent people in any meaningful way.

HMRC will look at what has happened and will treat it as personal debt. Where there has been fraud or tax evaision or the company has been trading while insolvent (having more debts than it is able to pay) they will hold the Ltd. Co. director responsible for the debt. He will also be liable for unpaid personal Income Tax and National Insurance and there is no way he can avoid that.

His best bet is to first talk to his accountant and get the figures on what he owes and what the penalties are likely to be. Be [prepared to pay for them to help sort out the mess and prepare the appropriate returns.

Then he needs to talk to HMRC. Be honest and upfront with them about the situation and offer to come to an agreement to pay the outstanding debts.

He is up tulip creek and is going to have to paddle *very* hard to avoid ending up in court, bankrupt and and potentially in prison.

**alphadog** · 29 July 2015, 07:51

Tell him he has to man up and pay the bills. If he is capable of earning 2k per week he is capable of making a few phone calls and deciding how best to pay the bills. No point in you getting involved or stressed out, particularly where there is only a limited amount of things you can actually do.

It's better that he faces the consequences now than trying to brush it under the carpet cos that is only going to make things worse.

**stek** · 29 July 2015, 07:59

What visa is he on?

**S45YTH** · 29 July 2015, 08:56

Thank you for your replies.

I know i have no powers in actually speaking with any department and the accountant can't tell me anything regarding outstanding debt.

I am trying to get an understanding of what actually he may be liable for as at the moment new can only go off what my predictions are.

NI - £2000 per year
Vat - £20000 per year
Corp tax - £10000 per year

So assuming he has not paid any for 3 years, I'm thinking he owes around £96000.

I know these numbers are estimated but assuming they are correct, would he be liable to pay all of it off, or will some get wiped clean as they are tied to a business with no funds?

I am doing my best to help him out, but i think of we can understand exactly what he needs to pay back then that might give him the push to do it. I'd hate to see him prosecuted and potentiality jailed as he is married and kids are involved. I don't think the wife knows about any of it.

S

**S45YTH** · 29 July 2015, 09:01

Stek. He is not on a visa. He is a UK citizen.

**pr1** · 29 July 2015, 09:25

he's even been taking the VAT out and putting it in his pocket? oh dear

assuming 2k/week exc VAT @ 46 weeks per year
(net turnover = 92k, gross 110k)

assuming he took everything out as salary (say 10k) and dividends
per year, he owes about
VAT = £18400
corp tax = £16000
higher rate tax on dividends = £10000
NI = £240

about £44.6k per year

plus interest and penalties

if ~~you've~~ he's been paying the accountant he's been ignoring he can at least offset that against his corporation tax

there's no way you'll be able to argue taking EVERYTHING out negligently, best of luck

I hope ~~you~~ your close family member know a good lawyer

**DaveB** · 29 July 2015, 09:30

Originally posted by S45YTH View Post

I know these numbers are estimated but assuming they are correct, would he be liable to pay all of it off, or will some get wiped clean as they are tied to a business with no funds?

S

He will be liable for all of it. As company Director he is responsible for ensureing that accounts are filed and relevent tax liabilities are paid. The situation is a result of his failure to meet his legal obligations as a Director and he will be held liable for the debts.

Read this, https://en.wikipedia.org/wiki/Pierci...corporate_veil

**Jessica@WhiteFieldTax** · 29 July 2015, 09:49

Originally posted by DaveB View Post

He will be liable for all of it. As company Director he is responsible for ensureing that accounts are filed and relevent tax liabilities are paid. The situation is a result of his failure to meet his legal obligations as a Director and he will be held liable for the debts.

Read this, https://en.wikipedia.org/wiki/Pierci...corporate_veil

Although it is theoretically possible, it would be very unusual for tax authorities to proceed with collecting CT and VAT from a director. The hurdles in doing so are high, and there is normally no appetite for throwing good money after bad.

OP / friend needs a meeting with an accountant or, probably, an insolvency practitioner. It's a well worn path of woe, and if OPs friend is determined to make a new start then it's probably worth facing up the the pain of bankruptcy or IVA now.

Advice needed urgently