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Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Hi there Im in a little bit of bother and Im getting conflicting

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Hi there I'm in a little bit of bother and I'm getting conflicting advice.
I ran a ltd company for approx 4 years it stopped trading in dec2012. I had payed all vat and personal tax but I have corporation tax of approx 21000-23000. This is from1st of May 2011- April 2012 and from May 2012- dec2012.
My company has no assets and hasn't been trading since dec2012. I tried to get the company struck off from company house but the hmrc objected.( twice)
I have been told the route to go down is voluntary liquidation which will cost 3000 and I don't know if this will be the end of the matter.
Or let the hmrc take me to court? And get liquidated this way.
I have been told that I will not be liable as it's a ltd company.
Any advice would be greatly appreciated.
I now work for a company paye.

Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer.

Could you advise how the Corporation tax position got to the point it could not be paid, as whilst its true that directors are not deemed to be personally responsible for any tax owe4d, this is dependent on their being no blame/fault sitting with the company directors, for mismanagement of the company, so its not always as clear cut as you seem to have been advised.
Perhaps you could expand a little on the position. And what conflicting information you are receiving.

Voluntary liquidation sees you remaining responsible for all debts - but a liquidator works with you to clear said debts. And this is by far the better option.

Bankruptcy usually cannot be agreed to if you only debt is tax owed to HMRC - so do you have other creditors waiting payment - this will see all debts wiped out, but does place risk on your home, any assets you have.

But which is the best way for you is something you need to take advise from a debt expert, as we are UK tax experts but are not in a position to offer debt advise, which I am sure you can appreciate.


Customer: replied 4 years ago.
I was taking all the money out of the company as I always had and then doing extra weeks a few months before it was due but work circumstances changed and that was no longer an option.
Is there a possibility they will chase me for all the money as I have no way of raising anywhere near that. I have no other creditors just the hmrc.

Thanks for your response and honesty with the information.

Then I am afraid you will be treated as liable to pay this tax owed, as its was through your actions that the company had insufficient funds to make good its tax obligations.

It may (and please do take actual debt advise on this) be you only option to wait for HMRC to force you into bankruptcy - which will have the effect of
•you can be forced to cease trading or you lose control of your business
•the court appoints someone to investigate your financial affairs
•your goods and/or assets are sold to pay the debt (plus costs)
•you may be unable to obtain credit over a certain amount
•future income is used to settle current debts

Now the business has ceased trading and has no assets - but you could be forced to pay this out of your own pocket, and a court would determine what you can afford to pay back each month (although may dismiss some of the debt, although this is dependent on your level of income)
But I think you will finds that you cannot voluntarily enter into bankruptcy yourself as its just tax debts

But at this stage you would need to seek independent debt advise - to see if you can enter into voluntary bankruptcy, which does appear to be the better option


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