Tax liability after LTD wound up

[DeludedAussie]

Tosh.

If the company becomes insolvent because a director breached the code of directors duties, then the liquidator can consider a claim against the director, to the benefit of the creditors.

Linky.

It is not tosh - I have spent many weeks dealing with liquidations - Salary payments are preferential over and above HMRC as long as they are reasonable

As a contractor you could easily claim a salary of 100K to be reasonable.

How else do you think companies go insolvent? They have paid salary and bought tools for the trade and then lost a contract meaning they are unable to pay their debts!!!

[VectraMan]

If those expected payments were included in profit and can be written off, that should make the CT lower by 20% of them anyway.

I had a small Plan B Co. where we had to pay CT based on revenue that never actually turned up, but fortunately as we hadn't paid any dividends it was covered. Then in the next CT return it was listed as a bad debt and we were able to get a refund from HMRC, meaning we were then able to close the company and pay a small amount out to the directors with everything being square.

[DeludedAussie]

I had a small Plan B Co. where we had to pay CT based on revenue that never actually turned up, but fortunately as we hadn't paid any dividends it was covered. Then in the next CT return it was listed as a bad debt and we were able to get a refund from HMRC, meaning we were then able to close the company and pay a small amount out to the directors with everything being square.

Insolvency is defined as not being able to pay your debts as and when they fall due - If you start a company which has 100K in the first six months and that is withdrawn as salary (remember you need to pay PAYE on that) then the business stops because your contract is canned your company is by definiotn insolvent and doe snot pay the corp tax

You cannot do this with dividends because that is a distribution from retained profits - From salary you 100% can!

[borderreiver]

Unless you've behaved fraudulently or negligently, have an overdrawn DLA or have made illegal dividends, then AFAIK the debt dies with the company, whatever HMRC says.

[Wanderer]

Insolvency is defined as not being able to pay your debts as and when they fall due - If you start a company which has 100K in the first six months and that is withdrawn as salary (remember you need to pay PAYE on that) then the business stops because your contract is canned your company is by definiotn insolvent and doe snot pay the corp tax

Errrr, the company only pays CT on your profits so if the company spent all it's money on salary then there is no profit so therefore no CT to pay, no?

And if the company failed to pay the PAYE/NI due on the salary, it's quite possible a director could get a personal bill for that.

[DeludedAussie]

Errrr, the company only pays CT on your profits so if the company spent all it's money on salary then there is no profit so therefore no CT to pay, no?

And if the company failed to pay the PAYE/NI due on the salary, it's quite possible a director could get a personal bill for that.

The VAT being used to pay salary is what I am talking about as well ...