Reply to: Limited Company Director Change

[DoctorStrangelove]

The OP never came back, so we'll never know.

The latest thread re SC is Specifically In General.

[northernladuk]

The OP never came back, so we'll never know.

He's gone the whole hog and moved some backwards country with no Internet or phone coverage. Just hope he doesn't bump in to PC.

[ladymuck]

The OP never came back, so we'll never know.

[LondonManc]

Ok, I'll bite: what happened to the CorpTax and VAT money that is due to HMRC?

Spent at a guess - probably lost a contract and haven't had one since. Now the money's probably nearly all run out and they don't know where their next monthly bills are going to be paid from.

Now isn't the time for anyone to get preachy about war-chests - we're far from that situation and the guy is clearly desperate enough to be considering illegal things.

First thing I'd do is ring HMRC and explain that you've let this all get on top of you and admit that you panicked. You won't be the first person (or the last) that's new to contracting and didn't get a full understanding of the VAT and tax side because you hoped your accountant would just simply deal with everything. Ask them what you can do to get back on track because it's causing you stress and sleepless nights. Be humble and grateful and accept whatever they say. Form a plan to achieve it and put it into action. The hardest part is achieving any of it without any income though; ask them to factor that in whatever advice they provide.

[Paralytic]

To busy congratulating myself with a fowl pun to notice! (now corrected!)

To busy or not too busy, that is the question.

[Lance]

To busy congratulating myself with a fowl pun to notice! (now corrected!)

Cheers!

Too

[mjcp]

Phoenix

Too busy congratulating myself with a fowl pun to notice! (now corrected!)

Cheers!

[wattaj]

Hi Experts,

I am looking for advise on changing Directorship to other person for my Limited Company(i am the only director currently). I have some debts to HMRC(Corp Tax(One Year) and VAT(6 Months). Will they be transferred to New Director or are they still with me? who will be responsibility to those debts?

Please help on this.

Thanks

Ok, I'll bite: what happened to the CorpTax and VAT money that is due to HMRC?

[Lance]

Get your Bounce Back Loan, pay your creditors. That deals with the 1st, most pressing issue and is the cheapest way out short of someone giving you £ for nothing.

(edit: Pay the CT 1st, they charge interest on that one, but not on VAT. You've probably already had the penalties for the VAT anyway, so effectively its not costing any more than lost sleep currently)

Then... keep trading, paying everything on time (inc. the BBL when it becomes due) or stop invoicing, but keep the business open and keep paying money in yourself (assume no cash in the business) in 'till the BBL is repaid.

(a 3rd option is to then fold the business in a few months / years and the gov't sorts out the mess with the lender, but by then you'd have repaid the CT, VAT and kept up to date with future liabilities (...right?! do it! Don't make the mistake twice!), so you could argue the loan was valid *now* to get you through Covid and circumstances *then* (i.e. in the future) have caused the business to fail) - not morally good and might still bite you... There will be shed loads of small businesses going under post covid and mid recession, you have to hope that having a clean CT, PAYE and VAT slate together with *some* repayment to the BBL will make you less likely to show up on the IS radar for a closer look. Danger: you might fall fowl of pheonixing if you fold and restart in a shiny new PSC to keep on contracting... Umbrella might be the way to go for you!

M

Phoenix

if the company fails then phoenixing is less of an issue, however being a struck off director might be

[mjcp]

Get your Bounce Back Loan, pay your creditors. That deals with the 1st, most pressing issue and is the cheapest way out short of someone giving you £ for nothing.

(edit: Pay the CT 1st, they charge interest on that one, but not on VAT. You've probably already had the penalties for the VAT anyway, so effectively its not costing any more than lost sleep currently)

Then... keep trading, paying everything on time (inc. the BBL when it becomes due) or stop invoicing, but keep the business open and keep paying money in yourself (assume no cash in the business) in 'till the BBL is repaid.

(a 3rd option is to then fold the business in a few months / years and the gov't sorts out the mess with the lender, but by then you'd have repaid the CT, VAT and kept up to date with future liabilities (...right?! do it! Don't make the mistake twice!), so you could argue the loan was valid *now* to get you through Covid and circumstances *then* (i.e. in the future) have caused the business to fail) - not morally good and might still bite you... There will be shed loads of small businesses going under post covid and mid recession, you have to hope that having a clean CT, PAYE and VAT slate together with *some* repayment to the BBL will make you less likely to show up on the IS radar for a closer look. Danger: you might fall fowl of phoenixing if you fold and restart in a shiny new PSC to keep on contracting... Umbrella might be the way to go for you!

M

[Lance]

Hi friend

I can give you £500 for drugs if you become director in my company and I walk away

Friend - yes please

HMRC - hold my coat


Sent from my iPhone using Contractor UK Forum

I have no idea if that would work. But I got £5 that says if it does the OP wouldn’t be asking on here.

[GhostofTarbera]

Hi friend

I can give you £500 for drugs if you become director in my company and I walk away

Friend - yes please

HMRC - hold my coat


Sent from my iPhone using Contractor UK Forum

[Lance]

I'd imagine when you are trying to get out of situation you've made yourself without any liability he doesn't want to go to a professional as he knows they probably wont be interested in advising people how to cut and run.

You may well be right...
But in that case professional advice is exactly what’s needed. Maybe not sausage machine accountant, but they’re the people who know what to do.
The best we can do is try and guess the details and offer some occasionally questionable (often very good) advice.

[northernladuk]

This is a complex problem to which we on this forum have nowhere near enough details to provide proper advice.
Seek professional help, starting with your accountant, and then ask more specific questions here.

I'd imagine when you are trying to get out of situation you've made yourself without any liability he doesn't want to go to a professional as he knows they probably wont be interested in advising people how to cut and run.

[Lance]

Hi Experts,

I am looking for advise on changing Directorship to other person for my Limited Company(i am the only director currently). I have some debts to HMRC(Corp Tax(One Year) and VAT(6 Months). Will they be transferred to New Director or are they still with me? who will be responsibility to those debts?

Please help on this.

Thanks

The company has the debt, not the directors.
Changing directors will not fix this nor will it make it worse.
If the company is insolvent then the director has a bigger problem in that trading while insolvent is illegal.
And any potential director would be likely to refuse to take responsibility for that mess.

The shareholders are a different matter, as they ‘own’ the company. Limited liability protects shareholders, but doesn’t protect director/shareholders who caused the situation so well.

This is a complex problem to which we on this forum have nowhere near enough details to provide proper advice.
Seek professional help, starting with your accountant, and then ask more specific questions here.