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Ask Jeremy Aldermartin Your Own Question
Jeremy Aldermartin
Jeremy Aldermartin, Solicitor
Category: Law
Satisfied Customers: 6479
Experience:  Dual qualified Solicitor and Attorney
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My husband lost his contracting role in April (he and I only

Customer Question

My husband lost his contracting role in April (he and I only ones taking salary/ dividends). He had to take a perm job. The company has a big tax bill which is outstanding However has 20k in company account. I want to make sure it is ok that I still take a salary. Company still operating. Just that my husband isn't contracting at the moment.
JA: Where are you? It matters because laws vary by location.
Customer: Surrey uk
JA: What steps have you taken so far?
Customer: If he doesn't get another contract (hes looking) then might be going down insolvency route as without new money coming in, liabilities cannot be met
JA: Anything else you want the Lawyer to know before I connect you?
Customer: So no other steps taken atm
Submitted: 16 days ago.
Category: Law
Expert:  Jeremy Aldermartin replied 16 days ago.

Hi thank you for your message, I appreciate this is difficult circumstances and therefore hope to be able to provide some reassurance and insight. Please note this is not a chat service so responses may not be instantaneous. That being the case, in terms of your query, the main thing here will be to ensure that the company is still solvent and trading. In other words, if you are working for the company and the company is solvent i.e. it could pay the tax bill when due then you are fine. If not then you are trading when insolvent which is a breach of your directors duties (assuming you are a director). You can read more about that here: https://www.companydebt.com/what-does-trading-while-insolvent-mean/

Hopefully, I have answered your query in a way that is simple and easy to understand. If anything remains unclear, I will be more than happy to clarify it for you. In the meantime, thank you once again for using our services.

Customer: replied 16 days ago.
if the tax bill is not due right now.... because hmrc have given a grace period for small businesses then it's still solvent. We are still looking for work. Working on a website to launch. Networking etc. Feels like we are "working" to me. But my husband is very worried thinking we shouldn't be paid from company account. However because we dont have the finances to cover all our Bill's it is becoming a necessity to get paid through the company. And I would like my husband to take a salary too.do you think we are trading and that we are solvent? Could you please clarify that for me?
Expert:  Jeremy Aldermartin replied 16 days ago.

Yes that is correct precisely. If it is not due now and you anticipate obtaining work before the tax bill is due to enable you to pay the bill then that is fine. Hopefully, I have answered your query in a way that is simple and easy to understand. If anything remains unclear, I will be more than happy to clarify it for you. In the meantime, thank you once again for using our services.

Customer: replied 16 days ago.
Great. Thats really helpful
Expert:  Jeremy Aldermartin replied 16 days ago.

I am glad I was able to help. Have a great evening.