Company/Self Assessment quandry

[HenryG22]

Hi,

I am in a bit of an accounting quandry brought on through burying my head in the sand. I have saved the tax money due by the limited company, so procrastination is to blame, not intention (however probably not a defence). I am a freelancer earning around 30k - so we are talking relatively small sums, if that makes an impact.

My limited company has been dissolved due to, I assume a lack of returns - as a director I have not been struck off. There were fines from companies house for late tax returns, but the company has been shut down. I also have not done any self assessment returns for the past 2 years. I am about to do these 2 late self assessment returns however am worried by doing so it may lead HMRC to open up an investigation into the dissolved company. It has been closed for around 8 months, it was my intention to bring it back but was advised not to do so by my accountant as it could bring on an investigation - I feel like they wanted me to sign up to their services as I have yet to have any other advice about these self assessment returns, and their impact.

When I submit my tax return, if I do this correctly money owed to HMRC/companies house will then be evident to HMRC - will these 2 years self assessment tax returns arise suspicion? ( I realise technically speaking a dissolved company cannot make a revised return - however it could conceivably brought back by HMRC) What I would like to do is report the money earned during these 2 years as self employed, meaning I pay my due taxes - can I do this? Would this arise suspicion?

Thanks very very much

Henry

[craigy1874]

It should raise a flag, but it won't.

[northernladuk]

Pre Apr 2016 the advice for someone on 30k was to go Umbrella as the advantages of a LTD did not provide any benefit. Problem is T&S isn't allowed so it may not be the case but reading that debacle I think you need to seriously consider going brolly. Even if it you lose out on the T&S it should more than make up from your inability to run your financial affairs properly and with an umbrella you won't be legally responsible.

[HenryG22]

Thanks v much both

Pre Apr 2016 the advice for someone on 30k was to go Umbrella as the advantages of a LTD did not provide any benefit. Problem is T&S isn't allowed so it may not be the case but reading that debacle I think you need to seriously consider going brolly. Even if it you lose out on the T&S it should more than make up from your inability to run your financial affairs properly and with an umbrella you won't be legally responsible.

I am happy to go brolly or even self employed - I realise I am not organised enough to be doing what I am doing. If I reported the income I earned over those years as self employment income and paid tax via that means would this ring alarm bells with HMRC? (Trying to do the right thing here!)

[Scruff]

You weren't self-employed. You were employed by YourCo. Complete the forms accurately. It is self-assessment, after all?

The chances of an investigation are minimal, and the numbers would appear to be small enough not to warrant any significant charges. The risk when falsifying your return opens yourself up to a world of pain, however, should you be investigated.

[VectraMan]

Who has the money that the company owes in tax? You do? It's not your money; it's the company's money, which means it's now The Crown's money. And now you're talking about stealing from The Crown to pay your fraudulent tax return.

I don't know the answer but digging yourself in deeper can't be a good solution.

[HenryG22]

Who has the money that the company owes in tax? You do? It's not your money; it's the company's money, which means it's now The Crown's money. And now you're talking about stealing from The Crown to pay your fraudulent tax return.

I don't know the answer but digging yourself in deeper can't be a good solution.

I very much promise I am not trying to defraud - I am trying to pay what is due in a roundabout way, which as you mentioned probably helps no one.

If I go via the Limited company route I will have to submit 2 years of self assessment working at that company. This is such a worry - I wish I could pay what is due without opening up a huge can of worms.

[Scruff]

If you go about it the way you have indicated, it is fraud, whatever your "intentions" are.

Are you wearing socks?

[HenryG22]

If you go about it the way you have indicated, it is fraud, whatever your "intentions" are.

Are you wearing socks?

I'm missing the socks reference.

[jamesbrown]

First, this is a serious situation, so asking for opinions on the internet is not the way to go. That being said. Second, if you're not receiving appropriate advice from your accountant, find another one (i.e. a reputable firm of contractor accountants), quickly. If you're no longer contracting, you'll probably need to negotiate a one-off fee to sort this mess. Don't try to blag it or operate without advice. Third, there's no way to avoid arousing suspicion without digging yourself into a deeper hole, so you're going to have to suck it up, I'm afraid. It's unclear from your OP what the true status of your company might be and where any missing tax money is located. If the company has been dissolved, any remaining money in the company accounts will be declared bona vacantia, passed to HMRC, and very difficult to recover. However, in order to strike a company off the register, all creditors (including HMRC) must be notified of the intention, and HMRC must approve this (which they wouldn't ordinarily do with outstanding debts). If the company has been struck off, your new accountant will need to investigate whether this was done properly and whether any liabilities could be passed on to you personally. I don't think you really want this hanging over you indefinitely, so I'd suggest you seek help from a reputable professional and get it sorted ASAP.