Fight to save Ltd or not

[mjcp]

Is that legal?

In terms of personal insolvency (i.e. bankruptcy) they ask for and can look into transfer of assets in the previous 2 years - apparently people can see this sort of thing that far ahead and try to protect their assets - who'd have thought?

However, I'm not sure where the personal risk is coming from, short of the Dir loan. The other debts are for the PSC, not personal. Pay the CT 1st as its has interest being charged and a profitable PSC with a CT debt looks odd (after all, CT demonstrates profit, so should have been paid!). Then the VAT is an unfortunate loss for the revenue.

That leaves the BBL. No idea how that will be resolved, but the terms are quite clear: you weren't an at risk business when you applied (there is a documented definition of this, assume you did not fulfil those criteria?), you had a reasonable prospect of bouncing back at the time of application and the loan is very specific in stating the director's assets are not at risk.

As others have said, you can chip away at it from other PAYE income to eat into the DL. Beyond that HMRC are the same entity for VAT / CT so minor issues with showing preferential treatment if you pay CT 1st, but you could use TTP and make a single payment against both - HMRC will then divide as they see fit (think they either go oldest 1st or most expensive (i.e. CT due to interest) 1st, I don't recall)

Best of luck! PM if you need a call for support / my experiences (not identical, but some similarities).

M

[PCTNN]

All it takes is one contract and it's the flick of a switch.

If that's all it takes why did you start the thread? Seems like you've got it all under control then. Good job, mate

[Old Greg]

Is that legal?

Bloke up the road is giving it a good go. Mind you, he's currently a guest of the State.

[GregRickshaw]

Move the assets into someone else's name.

Is that legal?

[oliverson]

Look at the facts.

You run a business that has net negative assets of -£24K. It has £30K assets - the directors loan owed by you to the company - and £54K in liabilities (Corporation Tax due end of year (£18k), VAT deferred (£6k), Bounce back loan (£30k))

It has not generated any income for months. Accepted, the liabilities are not due immediately, so there is a chance you can get out of the situation.

It is unclear (you chose not to answer) whether you are still withdrawing funds from the company.

It would be interesting to know if the bounce back loan went directly into the directors loan, or whether you've taken any salary and dividends on the back of that loan, or in lieu of setting the funds aside for the HMRC liabilities. At the point where you took out that loan, the business was not revenue generating, and, by your own admission, it was not looking for new business.

It doesn't paint a picture of a director being in good financial control of a company.

One of your questions was whether HMRC could come after you for CT and VAT. How you have managed the company financials as a director has a direct bearing on the answer to that question.

Good luck with the job hunt.

There's something in the term 'bounce back loan'. A loan that enables a company to bounce back from the impact of coronavirus.

I doubt many directors are in good financial control of a company right now, especially contractors. The government effectively killed them dead with IR35 and then the pandemic nailed the coffin lid shut. Sure, there are those lucky ones that haven't been impacted yet. Good for them but let's not pretend there is negligence on the side of those like myself. As for paying myself from the loan, I'll do whatever it takes to survive this, just like I did the last crisis. If that means spending the CT and VAT as well, so be it. All it takes is one contract and it's the flick of a switch. c. £ 17k a month back into the account each and every month enables recovery.

[Paralytic]

I suspect a lot of contractors and businesses have a similar story to tell at the moment. The HMRC need to walk a line between getting money in and not scaring off a generation of entrepreneurs.

You really think HMRC care about that?

[PCTNN]

Sell the Lambo? Ouch.

Mmmm...unless he put it under the partner's name when he bought it.

OP, do you have assets? Anything at all? OP???

[SussexSeagull]

I suspect a lot of contractors and businesses have a similar story to tell at the moment. The HMRC need to walk a line between getting money in and not scaring off a generation of entrepreneurs.

[Old Greg]

I asked the same but it was never answered...

Give him a break.

[uk contractor]

Move the assets into someone else's name.

Bit of a legally grey area that one for obvious reasons! Although billionaires seem to get away with it!!