Will he get away with it...

[Crossroads]

... so I know of a guy who was a contractor for a short period - less than a year. Formed his Ltd, got a contract and started work. No idea of how he extracted profits but knowing of his approach to money I expect he will have simply taken it straight out the bank account. No paperwork, no further thought.

No accounts have been filed and CH have filed the first notice in the gazette for a compulsory striking off.

What will happen next? There must be some tax/NI due along the line somewhere, but will HMRC even be aware?

On the one hand it has nothing to do with me, but on the other it tarnishes those who like me pay their fair share.

[northernladuk]

What do you care? You don't know the exact and full details of the situation and it's none of your business... Like zero.

If karma catches up with him great stuff, if it doesn't then such is life. Move on. Plenty more to worry about than other peoples business.

[Pondlife]

Yes HMRC will be aware but there's good news and bad news for your erm ... mate

Bad news is more tax evaders are being sent to prison. Good news for them is that the sentences are shorter. Or it could just be a 200% fine. Fill yer boots!

http://www.ft.com/cms/s/0/5d58f0e2-0...#axzz3o4NVPaUH

[Crossroads]

What do you care?

Because it's another opportunity for Government / HMRC to paint us all as tax dodgers. Just like the 90% schemes, if you can get away with it, I'd quite like to as well. I would however like to think that you cannot get away with it.

[meridian]

It depends on the paper trail he's left. If he's filed VAT returns or payroll then HMRC will have something to tie him to a missing CT return.

If he's filed nothing in the year then it's less likely that HMRC will know that there is a discrepancy and it will probably be dissolved without anything further, with the assumption that the company was dormant.

[Michael at BI Accountancy]

Bad news is more tax evaders are being sent to prison.

I hear the porridge is rather nice?

On a serious note, HMRC are most likely unaware that your "friend" has been trading. There is a possibility that the company may slip through the checks and be closed. However I do believe HMRC also have the power to reinstate the company and chase for any liabilities (plus interest and penalties) owed.

What tends to happen is once companies house put in a request to strike the company off, HMRC will disallow as they know the company owes them money.

[cojak]

I hear the porridge is rather nice?

On a serious note, HMRC are most likely unaware that your "friend" has been trading. There is a possibility that the company may slip through the checks and be closed. However I do believe HMRC also have the power to reinstate the company and chase for any liabilities (plus interest and penalties) owed.

What tends to happen is once companies house put in a request to strike the company off, HMRC will disallow as they know the company owes them money.

Unless the OP makes HMRC aware by dobbing him in.. https://www.gov.uk/report-an-unregis...er-or-business

[Maslins]

It depends on the paper trail he's left. If he's filed VAT returns or payroll then HMRC will have something to tie him to a missing CT return.

If he's filed nothing in the year then it's less likely that HMRC will know that there is a discrepancy and it will probably be dissolved without anything further, with the assumption that the company was dormant.

A lot of truth in this.

Does lead the the painful conclusion that where someone's COMPLETELY negligent with their tax affairs, they're more likely to get away with it.

Thing is, from HMRC's perspective, there'll be thousands of companies opened every year where someone thought they had a bright idea, incorporated, it went nowhere, so they buried their head in the sand until Cos Hse killed the company off. If HMRC actively pursued every company which never filed anything it'd cost the tax payer a bomb, and for many there'd be no tax at stake...so what can they do?

I'm sure what HMRC would like to do is have automatic access to every company's bank transactions...but you can imagine how popular that would be.

So bizarrely, I think the best thing for the average Joe to do when they find out about stuff like this, is to be a grass and dob them in as per Cojak's link.

[VectraMan]

Surely even if the company has done nothing there will be fines to pay for not submitting the return. It's not just the tax that they'll be looking to collect.

It seems to me if you're going to evade tax in this way then you're much better off submitting entirely false accounts and tax return, and then pay the £10 to close the company legitimately. They're much less likely to look if you do that.

[WordIsBond]

Surely even if the company has done nothing there will be fines to pay for not submitting the return. It's not just the tax that they'll be looking to collect.

It seems to me if you're going to evade tax in this way then you're much better off submitting entirely false accounts and tax return, and then pay the £10 to close the company legitimately. They're much less likely to look if you do that.

Much harder to argue it was accidental / stupid, though. Can't claim depression made you do it or anything like that, so penalties are likely to be steeper.