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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 8122
Experience:  FCCA - over 40 years experience as a qualified accountant (UK based Practitioner)
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I set up a company with my friend a couple of years ago, he

Customer Question

I set up a company with my friend a couple of years ago, he dealt with the accountant and payroll etc and I dealt with the clients and managed our team. I withdrew £3500 per month as agreed from the business account and marked this under the category directors wages. He recenlty moved to Thailand and cannot b bothered running the business and as such we need to Dissolve /Liquidate. I have recently found out that I am not actually a shareholder and that there is only 1 share the business in my partners name. I have also found out that the money I took out each month was not going through PAYE (only a minimum amount was being taken) We have a £50k COVID loan to pay back and unfortunately I cannot run the company without my partner so we have to dissolve. As I am a director and not a shareholder I am confused on what I need to pay back. Do I need to back pay all the tax from the money I have taken above what went through PAYE, is this classed as a directors loan even though I am not a director? Finally am I liable for the Covid loan? Can anyone help? Thanks
JA: Have you talked to a tax professional about this?
Customer: No
JA: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.
Customer: NO
Submitted: 21 days ago.
Category: Tax
Customer: replied 21 days ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call.
Customer: replied 21 days ago.
Let me know if you need more information, or send me the service offer(s) so we can proceed.
Expert:  taxadvisor.uk replied 21 days ago.

Hello and welcome to JustAnswer. I’mCustomer a UK qualified accountant. Reviewing your question and will respond to you shortly.
Many thanks

Customer: replied 21 days ago.
Some typos there, I'm a director though not a shareholder and realised the money I have been taking has not gone through PAYE, wondering what I need to do do exit the business cleanly
Customer: replied 21 days ago.
I would like some feedback before I pay for a call
Expert:  taxadvisor.uk replied 21 days ago.

Thank you for your reply.

As a director you are responsible for the financial management of your company. You should have made sure your salary was properly put through under PAYE scheme and that correct tax and NI was deducted at source.

As you are not a shareholder, supplementary payments to you over and above what has been reported to HMRC are either additional salary or director's loan. Both hace tax consequences.

Covid loan is repayable and the reponsibility lies with the directors of the company and not the shareholder.

You may not like the answer, but as a professional, I have to give you the best advice possible based on the facts.

My aim is to give you a professional service. I hope this is helpful and answers your question.

If you need more assistance, please use the reply box below and let me know. It has been my pleasure to assist you with your question.

Expert:  taxadvisor.uk replied 21 days ago.

Hi there

Just checking to see if you need me to clarify anything or if you have any additional questions - I am happy to help!

Many thanks