Reply to: Will he get away with it...

[Bozwell]

Indeed! Wait for the wails of dismay when Land Registry tie up with HMRC and all the people with two or more houses but not rental properties ticked on their SA's start getting letters... Oh.. that's right, it doesn't happen so they won't

I think they might actually be doing this already! A couple of years ago I had letter from HMRC questioning me about a flat I had owned about 7 years before. It seems that because my name was attached to two properties they had made a connection and assumed I must have been renting one out. Truth is I had lived in the flat before I met my wife and when we bought a house together it was left empty for a period of time while I was doing up before sale. They didn't pursue it any further.

[northernladuk]

If only the left hand knew what the right hand was doing...

Indeed! Wait for the wails of dismay when Land Registry tie up with HMRC and all the people with two or more houses but not rental properties ticked on their SA's start getting letters... Oh.. that's right, it doesn't happen so they won't

[MrMarkyMark]

If only the left hand knew what the right hand was doing...

Should stay that way, considering they award every contract to the likes of Crapita .

[sal]

Good point. A simple data extract from each source (companies proposed for being struck off vs intermediaries reporting) and lookup should be all that's needed to tie income to company.

If only the left hand knew what the right hand was doing...

[LondonManc]

Surely even if the company has done nothing there will be fines to pay for not submitting the return. It's not just the tax that they'll be looking to collect.

It seems to me if you're going to evade tax in this way then you're much better off submitting entirely false accounts and tax return, and then pay the £10 to close the company legitimately. They're much less likely to look if you do that.

They'll gladly spend £2 or whatever it costs to run off a threatening letter but the cost of chasing versus chance of recovering £unknown is the key. It's a bit like debt collection agencies. They often buy books of debt for so many pence in the pound. It's the cost of the chase versus the chance and size of the debt that matters.

[NickNick]

If the strike off does go ahead then AIUI your friend has got away scot free...

Boo

Came here to say this. If the company has been struck off then there is no company to chase for missing tax. However the individual has received some income and so could be asked to account for that and pay tax on it I owuld guess.

[DonkeyRhubarb]

This is a slightly different scenario but I know of a few people on schemes who didn't disclose it on their tax returns. Pure evasion but they got away with it.

People on schemes, which were not disclosed under DOTAS, have also faired better. I know of one scheme where around 90% of users were never investigated. They declared the income on their tax returns but, because there was no scheme reference number (SRN) on the returns, HMRC missed it.

[meridian]

He's unlikely to get away with it.

The employment intermediary report that recruitment agencies submit to hmrc includes the company registration number. So hmrc will know that the company has traded and will eventually catch up with him. The days of dodging the taxman are gone.

Good point. A simple data extract from each source (companies proposed for being struck off vs intermediaries reporting) and lookup should be all that's needed to tie income to company.

[Boo]

No accounts have been filed and CH have filed the first notice in the gazette for a compulsory striking off.

What will happen next? There must be some tax/NI due along the line somewhere, but will HMRC even be aware?

A friend of mine who worked in a firm of liquidators said that HMRC would almost certainly not bother to raise the form required to prevent the striking off. This was a few years back and I seem to recall reading something about a change of policy/procedure that may make that info out of date.

If the strike off does go ahead then AIUI your friend has got away scot free...

Boo

[JB3000]

... so I know of a guy who was a contractor for a short period - less than a year. Formed his Ltd, got a contract and started work. No idea of how he extracted profits but knowing of his approach to money I expect he will have simply taken it straight out the bank account. No paperwork, no further thought.

No accounts have been filed and CH have filed the first notice in the gazette for a compulsory striking off.

What will happen next? There must be some tax/NI due along the line somewhere, but will HMRC even be aware?

On the one hand it has nothing to do with me, but on the other it tarnishes those who like me pay their fair share.

He's unlikely to get away with it.

The employment intermediary report that recruitment agencies submit to hmrc includes the company registration number. So hmrc will know that the company has traded and will eventually catch up with him. The days of dodging the taxman are gone.

[WordIsBond]

Surely even if the company has done nothing there will be fines to pay for not submitting the return. It's not just the tax that they'll be looking to collect.

It seems to me if you're going to evade tax in this way then you're much better off submitting entirely false accounts and tax return, and then pay the £10 to close the company legitimately. They're much less likely to look if you do that.

Much harder to argue it was accidental / stupid, though. Can't claim depression made you do it or anything like that, so penalties are likely to be steeper.

[VectraMan]

Surely even if the company has done nothing there will be fines to pay for not submitting the return. It's not just the tax that they'll be looking to collect.

It seems to me if you're going to evade tax in this way then you're much better off submitting entirely false accounts and tax return, and then pay the £10 to close the company legitimately. They're much less likely to look if you do that.

[Maslins]

It depends on the paper trail he's left. If he's filed VAT returns or payroll then HMRC will have something to tie him to a missing CT return.

If he's filed nothing in the year then it's less likely that HMRC will know that there is a discrepancy and it will probably be dissolved without anything further, with the assumption that the company was dormant.

A lot of truth in this.

Does lead the the painful conclusion that where someone's COMPLETELY negligent with their tax affairs, they're more likely to get away with it.

Thing is, from HMRC's perspective, there'll be thousands of companies opened every year where someone thought they had a bright idea, incorporated, it went nowhere, so they buried their head in the sand until Cos Hse killed the company off. If HMRC actively pursued every company which never filed anything it'd cost the tax payer a bomb, and for many there'd be no tax at stake...so what can they do?

I'm sure what HMRC would like to do is have automatic access to every company's bank transactions...but you can imagine how popular that would be.

So bizarrely, I think the best thing for the average Joe to do when they find out about stuff like this, is to be a grass and dob them in as per Cojak's link.

[cojak]

I hear the porridge is rather nice?

On a serious note, HMRC are most likely unaware that your "friend" has been trading. There is a possibility that the company may slip through the checks and be closed. However I do believe HMRC also have the power to reinstate the company and chase for any liabilities (plus interest and penalties) owed.

What tends to happen is once companies house put in a request to strike the company off, HMRC will disallow as they know the company owes them money.

Unless the OP makes HMRC aware by dobbing him in.. https://www.gov.uk/report-an-unregis...er-or-business

[Michael at BI Accountancy]

Bad news is more tax evaders are being sent to prison.

I hear the porridge is rather nice?

On a serious note, HMRC are most likely unaware that your "friend" has been trading. There is a possibility that the company may slip through the checks and be closed. However I do believe HMRC also have the power to reinstate the company and chase for any liabilities (plus interest and penalties) owed.

What tends to happen is once companies house put in a request to strike the company off, HMRC will disallow as they know the company owes them money.