Cannot pay VAT/PAYE due to Director's Loan - Need Advice !

[deeniguy]

Strictly speaking yes, but you'd better be bloody sure it is there when it's due to be paid. The likely outcome for the OP is him being barred as a director.

What I struggle with is taking director's loans when you're inside IR35 where you have to pay the taxes on 95% of your income anyway. The OP's accountant has to share much of the blame here: I'd report him to his accreditation body sharpish.

So being inside IR35, taking a director's loan should be a complete NO NO? If this is a common practice, then yes i will have a word with my accountant and express my disappointment. If not, then the blame lies solely with me.

[TheFaQQer]

So being inside IR35, taking a director's loan should be a complete NO NO? If this is a common practice, then yes i will have a word with my accountant and express my disappointment. If not, then the blame lies solely with me.

Where does the money come from that a company has "spare" to lend you, if 95% of the money has to be paid out as PAYE?

The only logical place that a company can accrue that is that the money belongs to someone else and needs to be paid out when the liability comes due.

From what you said earlier, you took a loan each month, and then repaid that loan when your salary came due. So even if you were working now - if you repay the loan to the company, that means you have no income that month. So how are you planning to live?

Until your gamble on the stock market pays off, I just can't see how you can ever hope to pay the money back to the company and then to the VAT man.

[deeniguy]

Where does the money come from that a company has "spare" to lend you, if 95% of the money has to be paid out as PAYE?

The only logical place that a company can accrue that is that the money belongs to someone else and needs to be paid out when the liability comes due.

From what you said earlier, you took a loan each month, and then repaid that loan when your salary came due. So even if you were working now - if you repay the loan to the company, that means you have no income that month. So how are you planning to live?

Until your gamble on the stock market pays off, I just can't see how you can ever hope to pay the money back to the company and then to the VAT man.

Its an unfortunate situation and a right mess, but your right, the only two things i depend on is the stock or to find work ASAP and pay them off on some sort of repayment plan over the next few months.

[dty]

If you looked at the stock and decided it was going to go up and you were wrong, what makes you think you're right now? Your track record isn't exactly good. There are many companies out there who make good money from people like you who, even in the face of declining prices, continue to refuse to admit they bought the wrong thing and cling to the hope that the price will not only change direction but go on to exceed the original purchase price.

Sell now. Get at least some capital out of this failed gamble. Then you'll at least have some cash to offer the VAT man.

[kal]

Its an unfortunate situation and a right mess, but your right, the only two things i depend on is the stock or to find work ASAP and pay them off on some sort of repayment plan over the next few months.

As others have said, you are better off getting a personal loan and paying your CT and VAT liabilities via that, you really don't want to be messing the tax and (even worse) VAT man around, they will get their pound of flesh...

[TheFaQQer]

Its an unfortunate situation and a right mess, but your right, the only two things i depend on is the stock or to find work ASAP and pay them off on some sort of repayment plan over the next few months.

If you get work now, and money comes in, you then have enough to pay HMRC. You don't have enough to pay HMRC and live on, because you've just repaid £5k to the company.

The only way that this can turn out well is that you find work, on a much better rate than the £200 you were on, and are outside IR35 so you can take some of that money as a dividend from your profits without having to pay PAYE. If that is unlikely to happen, then you need to either hit the jackpot on your shares or come up with some other way to make the money without incurring an income tax liability.

[TheFaQQer]

As others have said, you are better off getting a personal loan and paying your CT and VAT liabilities via that, you really don't want to be messing the tax and (even worse) VAT man around, they will get their pound of flesh...

What are the chances of getting a personal loan now - given that the company has no assets, there is no contract in place (or imminent), the OP already has a £5k loan outstanding and is looking at signing on because they have no money to pay the bills?

Only wonga is going to go near that scenario, and that's really, really not going to help!

[dty]

Sell the freakin' shares! Unless they've already lost, like, half their value! In which case, sell the freakin' shares cos you're crap at picking then and they won't recover.

[TheFaQQer]

Sell the freakin' shares! Unless they've already lost, like, half their value! In which case, sell the freakin' shares cos you're crap at picking then and they won't recover.

If they are American OTC shares, I suspect that it's not going to be that easy to get rid of. But some kind of income has to be better than nothing.

[eek]

What are the chances of getting a personal loan now - given that the company has no assets, there is no contract in place (or imminent), the OP already has a £5k loan outstanding and is looking at signing on because they have no money to pay the bills?

Only wonga is going to go near that scenario, and that's really, really not going to help!

I doubt wonga is foolish enough to lend him the money. Even they have some standards you know...