Reply to: Agency mistake means it refuses to give money

[Wanderer]

So you've a large warchest , contracted for 11 years, yet crapped yourself over how many HMRC payments? Took advice to burn the company without researching it? If you'd overpaid dividends, there are ways and means of repaying your company...

I think the advice was that in the interim the OP should stop trading with the company while the accounts got sorted out. There is no suggestion that money owed to creditors (eg HMRC) won't be repaid or that the company won't cover it's liabilities, it's just that the advice was to stop using it and start again while the professionals negotiate a settlement with the creditors. It's quite possible that the directors will be treated as debtors with money drawn accounted for as directors loans that will be repaid to pay the creditors. It sounds to me like a company which has ceased trading is in a much stronger position, otherwise the directors may be throwing good money into a black hole or get all the company assets frozen.

As for researching what to do, I wouldn't count posting here as "research". I don't think it's unreasonable to take advice from a tax professional who has no doubt handled a number of these cases and knows how to deal with them correctly.

That's not to say that this isn't a massive mess though. Good luck sorting it out, I'd be interested to hear what the outcome is.

[perplexed]

I'd agree with northernlad.

So you've a large warchest , contracted for 11 years, yet crapped yourself over how many HMRC payments? Took advice to burn the company without researching it? If you'd overpaid dividends, there are ways and means of repaying your company...

[northernladuk]

Troll.

Even I got caught.

I dunno, was a dam good read and good following on debate so would like to think this is all good.

If it is a Troll though I think new standards have been set for quality trolling that are going to be tough to beat.

[d000hg]

I am not even slightly joking, or trolling. We have been running the company like this for years, and years. We have always paid our Corp tax, and personal taxes, but we have always drawn money down that, I know now, we didn't actually have, as we had corp tax liabilities outstanding, but acted on the premise future earnings would cover it, which it had until we were advised that what we were doing was illegal. Once we were told this, we were told by the accountant to stop trading, immediately, which we did.

However, for the previous 8 years, we have always paid our taxes, it is just the past one which we haven't, and have folded the company. We were advised to do this, btw, we didn't decide to do this, this was legal/accountancy advice. I don't understand the hostility, to be honest. We have been contracting for 11 years and never had an issue. Obviously, thats because we didn't know what we were doing was wrong.

There will be no KY jelly needed, as we have a good war chest, substantial chest and we not once deliberately traded insolvent.

I came here for advice, and all it appears that you want to do, is mock and pour scorn. It's not attractive.

Maybe you should have consulted a solicitor rather than an accountant.

[stek]

But you were not necessarily insolvent. You could have rescued the situation; especially if you had a source of personal cash. You could class a lot of companies as insolvent, if they didn't have a rich backer pumping money in as and when necessary. It seems very odd advice from the accountant to "stop trading", and very odd for you to wind up one company and start another basically on the same day.

Writing off the company like that, especially a one-man-band contractor company, will probably be interpreted as a big f-you to HMRC who may well come sniffing on everything you touch. If they have any suspicion you have traded fraudulently then you are in serious, get-a-lawyer trouble. You are a director and expected to know the rules.

'Lifting the veil (of incorporation)' ISTR.

Winding up the company doesn't automatically draw a line under it, as oversteer says.

[oversteer]

But you were not necessarily insolvent. You could have rescued the situation; especially if you had a source of personal cash. You could class a lot of companies as insolvent, if they didn't have a rich backer pumping money in as and when necessary. It seems very odd advice from the accountant to "stop trading", and very odd for you to wind up one company and start another basically on the same day.

Writing off the company like that, especially a one-man-band contractor company, will probably be interpreted as a big f-you to HMRC who may well come sniffing on everything you touch. If they have any suspicion you have traded fraudulently then you are in serious, get-a-lawyer trouble. You are a director and expected to know the rules.

[Zoiderman]

I am missing something then, you have a substantial warchest, put it back in the company and it's no longer insolvent, no need to wind it up and have all this hassle

But it's immaterial as you have this other company now, if you have a signed contract and have a valid invoice both for the new company and the agent has not paid new company then follow it up as you would any commercial debt ie letter before action, moneyclaim ..

I suggested this to the accountant, and he said to simply wind it up. A petition is now being built and from their, my liabilities will be decided. I am sure I will have to pay something, and I will.

I will take action now, as they've now been a bit peurile over the VAT owed to the new company. I was going to walk away about it, but the FD has been proving his manliness by making me deal with him directly, which I refused to do, to assert his manliness.

One thing that did tickle me, is that as an FD, he didn't understand you didn't simply become insolvent and have the company clsoed, that you had to build a case for placing the company as insolvent. Caveat emptor with these guys; I will never work with them again.

[oversteer]

I am missing something then, you have a substantial warchest, put it back in the company and it's no longer insolvent, no need to wind it up and have all this hassle

But it's immaterial as you have this other company now, if you have a signed contract and have a valid invoice both for the new company and the agent has not paid new company then follow it up as you would any commercial debt ie letter before action, moneyclaim ..

[Zoiderman]

I am not even slightly joking, or trolling. We have been running the company like this for years, and years. We have always paid our Corp tax, and personal taxes, but we have always drawn money down that, I know now, we didn't actually have, as we had corp tax liabilities outstanding, but acted on the premise future earnings would cover it, which it had until we were advised that what we were doing was illegal. Once we were told this, we were told by the accountant to stop trading, immediately, which we did.

However, for the previous 8 years, we have always paid our taxes, it is just the past one which we haven't, and have folded the company. We were advised to do this, btw, we didn't decide to do this, this was legal/accountancy advice. I don't understand the hostility, to be honest. We have been contracting for 11 years and never had an issue. Obviously, thats because we didn't know what we were doing was wrong.

There will be no KY jelly needed, as we have a good war chest, substantial chest and we not once deliberately traded insolvent.

I came here for advice, and all it appears that you want to do, is mock and pour scorn. It's not attractive.

[MarillionFan]

Ohhh

Emmm

Geeee

Deep tulip - could be a sockie/troll so no sympathy from me yet...

Troll.

Even I got caught.

[stek]

Ohhh

Emmm

Geeee

Deep tulip - could be a sockie/troll so no sympathy from me yet...

[d000hg]

The advice to dump your first company sounds very dubious to me as a layman. If you were paying the correct amount of tax, and basically just running ahead of yourself, that would sound pretty simple to fix.

[The Agents View]

You got it wrong, and are now trying to get out of "paying your dues". You are essentially trying to avoid tax.

As posted previously, I'd be considering the purchase of an ALMIGHTY tub of KY Jelly, and assuming the position.

There are only two things certain in life - Death and Taxes (actually I can think of a few more - including England being rubbish in world cup football, and the wife not putting out after marriage - but that's beside the point).

[oversteer]

It turns out, that I have been naïve, and have been running my company insolvent for 5 years. I have been simply taking money out I don't own, then paying Corporation tax later in the year out of earnings; I have, effectively, been spending my money as I earned it, and paying tax, or planning to pay tax, on future earnings

This doesn't make sense, what have you been "taking out" of the company? All of the billed income less whatever the previous year's corp tax was ?

What have you put on your 4 sets of end of year accounts and CT600 ?

Have you actually paid HMRC any money?

Have you completed a self-assessment tax return?

re. the payment, i suspect you could probably take them to court for some sort of breach of contract, but that will be the end of your contract. Also, you might have bigger things to worry about.

[SueEllen]

Can someone explain what Phoenix is?

Phoenix company - Wikipedia, the free encyclopedia