Overpayment from old contract

[northernladuk]

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I tend to shut companies down after 3, 4 years anyway, as it compartmentalises.

Oh dear... And start another one straight up?

No aggro here, just straight talking. It's what I do. I don't think you are thinking this through. You've been over paid, you've paid taxes on that over payment. You need to pay the money back which means your taxes were incorrect so can be adjusted so you get your money back.

[SaltyLevels]

Oh dear... And start another one straight up?

No aggro here, just straight talking. It's what I do. I don't think you are thinking this through. You've been over paid, you've paid taxes on that over payment. You need to pay the money back which means your taxes were incorrect so can be adjusted so you get your money back.

Thanks, sorry, mistook it for being aggro.

I have utterly no issues in repaying as long as I don't lose out, as I really wasn't party to any error here; we pull down quite a sum each quarter (my wife also contracts) so wouldn't have noticed it. I think it being over Xmas confused matters too, as it simply seemed like a normal quarters money we take down.

I don't want you think I am trying hard to avoid paying it, that's not what I want to do, I just want to make sure I don't lose out to a mistake I had no part of.

As for the companies changing every 3-4 years. I was advised it was normal practice as long as they were completely clear or any monies owed, and that you weren't phoenix'ing them.

The paperwork is boxed up and released after 6 years. There's absolutely nothing wrong with this approach as long as you're not running up debt, shutting them down and then starting again.

Edit:

I should add, I was worried that as we'd crossed reporting periods I couldn't reclaim taxes already paid. If that's incorrect, then we're grand. I reiterate, I am not trying anything on here; I acknowledge there was an overpayment, one I benefited from, and as such, I should repay it, but only as much as that I am not out of pocket.

[MrMarkyMark]

As I have paid taxes on the money

Yes, which you have over payed, so should be able to get back.

As for the companies changing every 3-4 years. I was advised it was normal practice as long as they were completely clear or any monies owed, and that you weren't phoenix'ing them.

Not normal practice at all, more like a sharp one .
How are the business activities performed by all these companies, you have closed, different?

[SaltyLevels]

Yes, which you have over payed, so should be able to get back.

So you acknowledge there have been loses then?




Not normal practice at all, more like a sharp one .
How are the business activities performed by all these companies, you have closed, different?

Why is it sharp practice?

Same business. HMRC don't seem to have an issue with it, as I have spoken to them about it. So, please, why do you?

[northernladuk]

Thanks, sorry, mistook it for being aggro.

I have utterly no issues in repaying as long as I don't lose out, as I really wasn't party to any error here; we pull down quite a sum each quarter (my wife also contracts) so wouldn't have noticed it. I think it being over Xmas confused matters too, as it simply seemed like a normal quarters money we take down.

I don't want you think I am trying hard to avoid paying it, that's not what I want to do, I just want to make sure I don't lose out to a mistake I had no part of.

I'd leave it with your accountant to sort out. No point worrying about it or making assumptions at this point. Just wait and see. We can't fix anything on here.

As for the companies changing every 3-4 years. I was advised it was normal practice as long as they were completely clear or any monies owed, and that you weren't phoenix'ing them.

The paperwork is boxed up and released after 6 years. There's absolutely nothing wrong with this approach as long as you're not running up debt, shutting them down and then starting again.

And are you claiming tax relief on the money in the company account every time you shut it down?

It's not standard advice to do this. I'd seriously think about getting a new accountant after this. Although we (and occasionally me) use the term 'Phoenixing' it isn't actually that. It's the Transations In Securities rule you want to be worried about.

Transactions in securities | Liquidations | MVL Online®

If you are shutting the company every 4 years for no other commercial reason than to gain a tax advantage you are in deep doo doo. If you don't claim a tax advantage when you do it then you 'might' be ok.

The HMRC you spoke to will be someone on a desk that doesn't know the real situation of your company and probably doesn't care so I'd be a bit wary about advice their call centres give. Get professional advice... and not from your accountant I'd say.

[SaltyLevels]

I'd leave it with your accountant to sort out. No point worrying about it or making assumptions at this point. Just wait and see. We can't fix anything on here.



And are you claiming tax relief on the money in the company account every time you shut it down?

It's not standard advice to do this. I'd seriously think about getting a new accountant after this. Although we (and occasionally me) use the term 'Phoenixing' it isn't actually that. It's the Transations In Securities rule you want to be worried about.

Transactions in securities | Liquidations | MVL Online®

If you are shutting the company every 4 years for no other commercial reason than to gain a tax advantage you are in deep doo doo. If you don't claim a tax advantage when you do it then you 'might' be ok.

The HMRC you spoke to will be someone on a desk that doesn't know the real situation of your company and probably doesn't care so I'd be a bit wary about advice their call centres give. Get professional advice... and not from your accountant I'd say.

We get no tax, or financial, advantage from it, claim no capital gains on it. We ensure the company is properly paid up in all taxes and simply start another.

When I was initially advised about it, I put it to HMRC in writing and received a letter back outlining as long as there were no advantages taken from it, nor monies owed, it was ok.

[MrMarkyMark]

We get no tax, or financial, advantage from it, claim no capital gains on it. We ensure the company is properly paid up in all taxes and simply start another.

When I was initially advised about it, I put it to HMRC in writing and received a letter back outlining as long as there were no advantages taken from it, nor monies owed, it was ok.

Removed post, as it was irrelevant given this response.

[northernladuk]

We get no tax, or financial, advantage from it, claim no capital gains on it. We ensure the company is properly paid up in all taxes and simply start another.

When I was initially advised about it, I put it to HMRC in writing and received a letter back outlining as long as there were no advantages taken from it, nor monies owed, it was ok.

Fair enough then.... I can't help feeling you are making yourself visible at HMRC for no advantage if you running the company properly. Your call. Not something I'm comfortable with at all but sounds like you've got all bases covered.

Hopefully one of our experience accountants that post on here will give their opinion.

[SaltyLevels]

It's the Transations In Securities rule you want to be worried about.

Transactions in securities | Liquidations | MVL Online®

Thanks for this. I am actually taking a 6 month sabbatical from June next year and this intimates I could get £25k out of the company tax free and then start up again 6 months later, as long as the names are different, I leave a good period between contracts and no assets are transferred. I geuinely didn't know this.

[MrMarkyMark]

Fair enough then.... I can't help feeling you are making yourself visible at HMRC for no advantage if you running the company properly. Your call. Not something I'm comfortable with at all but sounds like you've got all bases covered.

Hopefully one of our experience accountants that post on here will give their opinion.

I'm trying to work out the advantage of it, unless the OP feels it would shield him from a potential IR35 investigation.