let down by accountant - personal tax bill I can't pay

[northernladuk]

Once met a contactor(ex) who had done the same thing in mid 2001 when the market crashed, He'd been on a £600 per day rate in London. He ate at the best restaurants, flew everywhere first class, hotels, room service. Also took out a lease on a high end sports car & had a small flat. He'd not only spent all of the money in his business account basically living month to month.

Of course, he'd then lost his contract as Y2K has finished. Couldn't get another, then dipped into his VAT money. He couldnt pay his Corp Tax, personal tax & worse still the VAT.

They took him for the lot, took his flat, possessions, car went back & bankrupt.

There's a lesson there.

Is that to rent and lease your car??

[pmeswani]

Once met a contactor(ex) who had done the same thing in mid 2001 when the market crashed, He'd been on a £600 per day rate in London. He ate at the best restaurants, flew everywhere first class, hotels, room service. Also took out a lease on a high end sports car & had a small flat. He'd not only spent all of the money in his business account basically living month to month.

Of course, he'd then lost his contract as Y2K has finished. Couldn't get another, then dipped into his VAT money. He couldnt pay his Corp Tax, personal tax & worse still the VAT.

They took him for the lot, took his flat, possessions, car went back & bankrupt.

There's a lesson there.

So how did you manage to get back into contracting then?

[d000hg]

I beg to differ Sir.

If you are running a company you have responsibilities - you must take them seriously.

Correct but that makes no difference to whether you're working in finance or transport or haulage... you as a contractor are not going to be in a position your foolishness with money is a problem to the customer.

[northernladuk]

Correct but that makes no difference to whether you're working in finance or transport or haulage... you as a contractor are not going to be in a position your foolishness with money is a problem to the customer.

I see where you are coming from and generally agree with the prinicple of what you are saying but if your foolishness leaves a stamp on your credit and you expect to get a job in finance that requires you to get credit checked it is a problem to a customer.

[psychocandy]

Look at the Welcome/FAQ section. There is a stickie on how to search.

Use that to look for accountant recommendation and you will find many threads plus one that has a whole host of accountants that we use on this board.

You could also try the front page that has a number of reputable accountants on or the PCG who has some listed.

I would be interested to know how you got this personal tax bill and why you didn't know you were going to get it. I presume you have just been taking too many divis out with a care or thought for the consequence? Are you sure you haven't run your company in to trouble by doing this as well using the same approach? As a LTD director you are legally responsible for your companies finances don't forget. Might be worth asking your accountant to look through your company affairs and then take him on full time to run it going forward.

My vote is too many divis over the 40% bracket and not remembering you've got more tax to pay over and above the tax credit.

Or crap accountantant?

Must admit it never ceases to amaze me stories like this. I frequent a certain business forum to deal with the wifes business and every day you get stories like this from small business owners.... Unbelievable.

[psychocandy]

Probably not a sockie. Far more detail posted here. He didn't take into account higher rate tax on divvies, it looks like.

Ha ha. I was right and no I didnt read this first.

Strangely thats the other forum I referred to also !!!!

[Higgs Boson]

If you read the wording carefully, the OP states they are a limited company and have a huge personal tax bill.

Sounds very much like a situation of just taking lots of cash out of their company and then blaming the Accountant. If you have acted sensibly, would there not be money in the limited company for you to take as a dividend and cover this bill?

Sounds like another, blame the Accountant for stripping all the cash out of your company, story.

[cojak]

Somehow I think the OP is going to learn rather more than he wants about fiscal responsibility. It's no good blaming the accountant if you'd rather spend than budget...

[NotAllThere]

......I frequent a certain business forum to deal with the wifes business and every day you get stories like this from small business owners....

Perhaps if you're a member you could link back to this thread?

[BolshieBastard]

If you read the wording carefully, the OP states they are a limited company and have a huge personal tax bill.

Sounds very much like a situation of just taking lots of cash out of their company and then blaming the Accountant. If you have acted sensibly, would there not be money in the limited company for you to take as a dividend and cover this bill?

Sounds like another, blame the Accountant for stripping all the cash out of your company, story.

Couldnt agree more.

I see loads of posts here from people who want the cheapest accountant or want to go the DIY route. Then we see posts like this.

Blaming the accountant is all to easy especially this 'the accountant doesnt understand IT contracting.' WTF? its basic stuff whether someone is IT contracting or running any other business. You take dividends, you pay tax.

Somehow I think the OP is going to learn rather more than he wants about fiscal responsibility. It's no good blaming the accountant if you'd rather spend than budget...

WCS!