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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15950
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am a director of a limited company and have been so

Customer Question

I am a director of a limited company and have been so for 4 years.
I realise this is a mistake but I have never got round to registering the business for corporation tax and therefore have never had any correspondence from HMRC about this.
For myself personally, I've also never sent in a personal tax return although HMRC about 2 years ago sent me a self assessment document which after moving home I lost although I do have the UTR.
I have been taking a regular income from the ltd company. The company is below the VAT threshold.
Basically, how do I begin to get my affairs in order?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. What state are your records in? Did you never get round to completing and submitting the self-assessment tax return? How much income have you taken in each tax year? Can I assume you don't operate a PAYE system? What is the nature of your business?
Customer: replied 1 year ago.
The nature of the business is public relations. I am the only director and there are no other employees. I havent submitted any self assessments ever. Turnover has been consistent at around £60,000 and I've taken approx £45000 each year personally, the rest going to costs with some cash sat in the bank. I do not operate paye.
Customer: replied 1 year ago.
I had records but they were taken away from me in an unrelated fraud investigation (not into me but another resident at my property). Essentially i have no bookkeeping or receipts.
Expert:  TonyTax replied 1 year ago.
Thanks.
Can you get the records back? Surely, the Police cannot hang on to them forever?
Customer: replied 1 year ago.
I wont be getting the records back. It was an investigation by NHS Counter Fraud and they lost the memory sticks after siezing them
Expert:  TonyTax replied 1 year ago.
Thanks.
Leave this with me while I draft my answer. It will take a while so please bear with me.
Expert:  TonyTax replied 1 year ago.
Hi again.
There is no easy way out of the bind you are in. HMRC may go to town if and when they learn of the existence of your company, its lack of records and your failure to notify them about the company and your failure to complete personal tax returns as a director.
One way or another you are facing some significant tax liabilities, interest and penalty charges.
Its odd that you appear not to have been contacted about the company as HMRC learn of all new companies from Companies House. Failure to make annual returns to Companies House is another problem and I would have expected them to have taken action to strike the company off.
All I can really do is to recommend that you find an accountant, preferably by recommendation, to see if they can put some figures together though that will be difficult if not impossible given that you have no records. You might be well advised to look for an incomplete records specialist and a tax investigations specialist because you are going to have a difficult time with HMRC, especially if you try to handle it alone and run a business at the same time.
Take a look at the following links for information on penalties:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/473383/CC-FS11_10_15.pdf
https://www.gov.uk/guidance/corporation-tax-penalties
http://taxaid.org.uk/guides/taxpayers/tax-returns/late-tax-returns
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/422518/GP5_Late_filing_penalties_v2_9.pdf
I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
I did do the annual returns for the company.Would it be simpler if I fill out the tax return as if i were a sole trader for that period? Then wind up the company without any mention to hmrc.
Expert:  TonyTax replied 1 year ago.
I wouldn't recommend that you try to pull a fast one on HMRC but, as I said before, its odd that HMRC don't appear to know of the existence of the company.
Given how many years you are behind, HMRC will almost certainly start an investigation and will want to see your personal bank statements which may give away the existence of the company.
Customer: replied 1 year ago.
In that case, would it be wise to write a full and frank letter explaining the situation and then awaiting their advice.
Expert:  TonyTax replied 1 year ago.
It's better to make a voluntary disclosure rather than have HMRC find you but I'd still recommend you have some professional back up.
Expert:  TonyTax replied 1 year ago.
Hi, I'm just checking in to find out if you need further advice or clarification.