How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4426
Experience:  FCCA FCMA CGMA ACIS
75394688
Type Your Tax Question Here...
bigduckontax is online now

A joint partner in our business,who handled the office side

Customer Question

A joint partner in our business,who handled the office side of it,left us with considerable debts,most of which we've managed to pay off. He has now gone bankrupt,thus dissolving the partnership and out of the three remaing partners two have decided to form a new company and to revive the business. Worringly they now believe there is outstanding vat not paid which may be in the region of £50k,a sum well beyond anything they could raise.
Without opening a can of worms we need to explore the options and ramifications of what to do next. Obviously with a new company they want a new start,new vat number,etc but are now completely stumped as to what to do. Advice so far is confusing and often at opposites. Please can anyone advise correctly
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question. I bring bad tidings, however.

Sorry I was half way through an answer to you when JA decided to shut down my screen! A new company can be formed through any of the company formation agents and you can select your own name providing someone else hasn't thought of it first. That's the easy bit. Getting a VAT number is XXXXX a pain, but banking etc should present no problem.

Now, as regards XXXXX XXXXX partnership, you have, unfortunately, created fraudulent preference by paying off some debts and not others. You should have paid off each creditor including the VAT man parri passu ie proportionately in accordance with the amount of the debt. As a result there is a possibility that HMRC will seek to make individual partners bankrupt to recover the unpaid VAT. I am sorry to have to tell you that you have already opened the can of worms, big time! You need external professional advice and you need it quickly to avoid huge personal inconvenience. Your should consult a trusted local solicitor or accountant practicing in insolvency as soon a possible. Your position is made worse by running as a partnership not as a limited company.

I do hope I have thrown some light on your difficulties.
bigduckontax and other Tax Specialists are ready to help you
Customer: replied 3 years ago.

Hi


I did in fact view your answer yesterday and sent a reply,so something in the system glitched. It's showing at this end.


Thank you for your reply which is really what we thought when I wrote to ask. Our new accountants just swing between a similar thread or that a debt may


not carry on. This vat thing only arose a few days ago after the old partner went bankrupt. Up to then we were assured that all was paid and certaimly no one has sent us or accountants any notice. We haven't done anything as yet but pay off bank lloans,cards and overdraft he left,there were no other creditors. Sadly in our remote area of the south west real experts and good legal advice doesn't seem to exist,hence the question to you

Expert:  bigduckontax replied 3 years ago.
Don't I know it! I recall an HMRC office down there trying to tax redundancy payments which carried a statutory indemnity. Their stance didn't last long once I got involved!
Customer: replied 3 years ago.

Thank you for doing your best to point us in a direction. I appreciate that really there isn't much you can offer in more advice and,as you say,we need a clued up lawyer somehow to help guide further. If I dig up anything further I will get back in touch

Expert:  bigduckontax replied 3 years ago.
Maybe best at this stage to emulate Brer Fox, for he lay low and say nuffin! Thank you for your support.