Spending HMRC's money

[Chaffinch]

How bad is it if you spend the Corporation Tax you've got sitting in your business account?

For arguments sake, you've only got 4 months warchest (as you're new to the game) and you're benched for longer. What's your options?

Will accept the usual attacks but some semblance of "advice" would be gratefully received.

Ta

[AtW]

How bad is it if you spend the Corporation Tax you've got sitting in your business account?

It's perfectly fine if you don't mind getting new boyfriend called Bubba in dirty tuliphole of a prison.

[Chaffinch]

It's perfectly fine if you don't mind getting new boyfriend called Bubba in dirty tuliphole of a prison.

Ahh, so it's illegal. Suspected as much.

Hmm, so, what's the alternative?

[xoggoth]

HMRC's site is the best place to look for what to do if you can't pay CT on time. Seen a page on it recently.

PS As for illegaility, not sure anything much is done. I was searching in connection with a bastard "friend" of my son who emptied the company account, including the several k my son had lent him. Bugger all seems to have happened to him, he just changed the business name a bit and started up again.

[ThomasSoerensen]

if you spend it by paying yourself a salary then there is no problem as the salary payments reduce your Ltd.'s profit and that reduces the corp tax liability. In fact if you spend all the money earned in the same tax year your Ltd. will have 0 profit and be liable for 0 UKrupees in corp tax. so there is no problem.

You would of course never spend the money on stuff that is not business deductible.

[MrRobin]

So you've got corp tax reserved for payment to HMRC, based on the profit you have made so far this year...

Why not spend some of the profit, then you won't have to pay so much corp tax?

Unless you have already taken it all as dividends...

[alreadypacked]

How bad is it if you spend the Corporation Tax you've got sitting in your business account?

For arguments sake, you've only got 4 months warchest (as you're new to the game) and you're benched for longer. What's your options?

Will accept the usual attacks but some semblance of "advice" would be gratefully received.

Ta

You need a plan:
When is the Corporation Tax due?
Are you sure that you will have the money when it's due?

My plan:
Reduce the amount of Corporation Tax due. Take that amount out.
Reduce your overheads, mine are about 20-25%.
Get a job, any job.
Find out why you are on the bench and fix it.

HTH

[Chaffinch]

HMRC's site is the best place to look for what to do if you can't pay CT on time. Seen a page on it recently.

PS As for illegaility, not sure anything much is done. I was searching in connection with a bastard "friend" of my son who emptied the company account, including the several k my son had lent him. Bugger all seems to have happened to him, he just changed the business name a bit and started up again.

Cheers for that.

I don't think I have to pay till late 2012 - so it's not late yet, I was thinking spend it while benched but out of warchest and put it back when back in contract - No?

This is all worst case scenario contingency planning of course

[SimonMac]

Its not theres until the payment is due, so if you think you can make the money back by the time you have to pay it I see no problem in spending it

[SneakySimon]

Corp Tax

First of all, need to be clear - if it is current year then you need to have it. If it is previous year, between the end of the year and paying Hector, you can (at your own risk) do what you want.

I made a cock up a few years ago and my accountant sorted it for me (I had taken out too much div's with not enough left for the corp tax) Don't remember exact structure but the accountant reclassed some of my dividends as director loans and problem solved (issue was that the numbers didn't stack up, I could afford to pay the corp tax money)