Creditors Voluntary Liquidation Creditors Voluntary Liquidation
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  1. #1

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    Default Creditors Voluntary Liquidation

    I have started a Ltd company in 2011 and everything going smooth until 2012. In 2013, I took big amount on director loan and paid the whole amount by taking dividends in 2013. I have paid corporation tax and VAT for 2011. But not paid for 2012 due to no funds.

    Then I have approached liquidator and went for creditors voluntary liquidation. Then liquidator gone through my books and looking for further information. He is asking why I took dividends without paying corporation tax in 2013 for the tax year 2012. Actually I took dividends to pay directors loan and cleared that. But same time I haven’t paid corporation tax (only) as there is no funds and no trading.

    I am worrying that what will happen now. Any thoughts?

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    Did the company have the reserves available to pay a dividend?

    If not the dividends will be illegal and as such the directors loan will remain outstanding.

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    Quote Originally Posted by Kenny@MyAccountantFriend View Post
    Did the company have the reserves available to pay a dividend?

    If not the dividends will be illegal and as such the directors loan will remain outstanding.
    +1... Dividends have to come out of the after corporation tax reserves....
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    Did you have an accountant at the time and was this his advice or have you bumbled through on your own?
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    Sounds like you owe the money to HMRC? Well - company does - but you are a director?

    This has taken a while to come to light - why is that?
    Fight HMRC now! Help sue HMRC individual officers/government ministers for malfeasance in office. Visit https://www.loanchargejustice.com/ and scroll to the bottom of the page to donate.

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    Quote Originally Posted by Kenny@MyAccountantFriend View Post
    Did the company have the reserves available to pay a dividend?

    If not the dividends will be illegal and as such the directors loan will remain outstanding.
    No. Used dividends to pay the director loan. Then the trading got stopped as the client moved the business to a different country. Hence unable to get funds to pay the CT.

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    Quote Originally Posted by northernladuk View Post
    Did you have an accountant at the time and was this his advice or have you bumbled through on your own?
    Unable to get much help from the accountant... as he did a very bad job.. not monitored accounts.. only VAT returns and monthly pay slips.. only worried about year transactions while submitting returns.. not checked in advance.. I am very unlucky to have him..

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    Quote Originally Posted by BrilloPad View Post
    Sounds like you owe the money to HMRC? Well - company does - but you are a director?

    This has taken a while to come to light - why is that?
    Very new to trading and not aware of rules.. accountant less helpful on monitoring.. finally into problems.. went to liquidation.. after 12 months liquidator came with that question..

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    Quote Originally Posted by spec0203 View Post
    Very new to trading and not aware of rules.. accountant less helpful on monitoring.. finally into problems.. went to liquidation.. after 12 months liquidator came with that question..
    You will have to explain that to them.

    I am amazed that HMRC are unaware they are owed money.

    Do you have any money to pay HMRC on behalf of the company?

    If you can pay them, then "technical breeches" are not such a big deal if disclosed. I did it once myself. I inadvertently "traded while insolvent". Accountant wrote to HMRC. They got their cash. No harm done.
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    Quote Originally Posted by BrilloPad View Post
    You will have to explain that to them.

    I am amazed that HMRC are unaware they are owed money.

    Do you have any money to pay HMRC on behalf of the company?

    If you can pay them, then "technical breeches" are not such a big deal if disclosed. I did it once myself. I inadvertently "traded while insolvent". Accountant wrote to HMRC. They got their cash. No harm done.
    Thanks for the reply.

    I have owed the money to HMRC around 17k and no funds in the company account as there was no trading. Hence took advice of friends and went for CVL (Creditors voluntary liquidation). After 12 months liquidator asking why you took dividends when there is a CT is due.

    I am not doing any trading after company made insolvent.

    I have left the country after the company made insolvent and came recently to UK to find a job.

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