Advice on paying 2008 /09 tax

**TheFaQQer** · 18 November 2009, 13:02

If the company has no assets, then I can't see there's too much that they can do if you liquidate the company, or declare bankruptcy or whatever.

They might be able to prove that you (as a director) were negligent and then you lose your "limited liability" protection and they will come after you personally for the debt.

IANAA

**Sally BFCA** · 18 November 2009, 13:02

I would advise that you contact HMRC and explain your situation sooner rather than when you start getting demands and penalties. They should agree payment terms for you. It is in your interest to prove that you are being responsible and taking action as penalty rates are determined including this factor.

**centurian** · 18 November 2009, 18:13

I'm not sure you can simply liquidate the company. I think HMRC have powers to transfer the debt to you personally and then go after your house if you still don't pay up.

I'm not sure it applies in this scenario, but if it was really an option, surely everyone would be doing it every year.

**malvolio** · 18 November 2009, 19:46

Regulation 72 is the statute that can transfer company debts to a responsible director if you try to close a company with outstanding debts. So yes, closing YourCo offers no protection. Imposition of penalties overf and above tax owed and interst are also permitted under these rules.

That said, reading the OP, I'm not sure this is a company debt anyway, sounds more like a personal one to me (which may be why the accountant has lost interest)

Either way, the best advice is as Sally said - talk to your tax office and start negotiating. The money will have to be paid somehow.

**Darren@UptonAccountants** · 19 November 2009, 08:44

Tax

Depending on the size of the debt to HMRC, it maybe cheaper to pay an insolvency practitioner to put the company into liquidation.

As Mal says, if you dissolve it yourself the debt could be transferred to you personally.

**virtualm** · 22 November 2009, 14:38

Thanks guys,

Not sure if I know the differece between a company debt and a personal debt. My invoices were always paid in a Ltd Company business account, I am the only director of the company. The Ltd Co was registered to my personal home address so I guess insolvency would mean HMRC would come after the debt at the property anyway.

I'll give them a call tomorrow and see what my options are.

I guestimate the debt to be around £5k as I had lots of travelling expenses when I was contracting.

**malvolio** · 22 November 2009, 15:03

In your capacity as an officer of the company, there is no practical difference between company and personal debt - that's what Reg 72 is all about. This is statutory taxes owed, remember, not unpaid bills; there is a difference.

**Tarquin Farquhar** · 22 November 2009, 16:18

Originally posted by virtualm View Post

Probably like some, I was benched for 7 months before I found work this year. I then went perm but have moved abroad, rented house out in UK etc.

My Ltd co remains dormant with 0 funds in account. I paid off my 2007 taxes and then used my warchest for 7 months. I should have paid the tax early and went on benefits but you live and learn.

Sorry, but that wasn't your warchest that you were spending, it was HMRC's money. They will definitely still want it.

**centurian** · 22 November 2009, 17:17

Originally posted by Tarquin Farquhar View Post

Sorry, but that wasn't your warchest that you were spending, it was HMRC's money. They will definitely still want it.

Not sure I quite agree with the sentiment that it was their money in the first place. We've earned the money, then the government comes along and forces us to hand over some of it.

However, for all intents and purposes, we should treat it as HMRC's money. Unless you're getting pots of interest, better to pay what is owed to them ASAP, then you know what you have left is really yours.

Advice on paying 2008 /09 tax