Will my brother go to prison?

[Master Chief]

Ok, I'll try to keep this as succint as I can. My brother is in a bit of a pickle, well quite a big pickle in fact.

 

A couple of years ago, my brother had a sucessful business (ltd Company) and his marriage broke down after she did the dirty on him for the second or third time.

 

As is frequently the case, he fell quite badly ill with depression and his business went to the wall. With no income to speak of, unfortunately he dibbed into the company coffers and took (he thinks) around 3-4 grand out in addition to selling the company van and pocketing the proceeds, which amounted to about another £3k.

 

He realises that it was wrong, but he was (still is) in quite a bad state and was just trying to survive.

 

Subsequently, he did a runner and for the past couple of years has been flying under the radar. He is still very depressed and homeless (living in a small caravan). At the moment he just can't face the consequences of what he has done or the £30k (est) of personal debt.

 

I understand where he is coming from, having been in a very similar situation myself.

 

Problem is, his life is not going to improve much until he resurfaces and faces up to these things he tried to leave behind.

 

I'm attempting to help him and have given him some reassurance as regards his personal debt, but I'm not sure where he stands in realtion to the company debt and misappropriation!

 

The last thing I want to do is convince him to exit stealth mode and be banged up, that really would not help him at all.

 

Is anyone able to offer some advice as to what might happen to him?

 

Thank you.

[postggj]

Dipped into company coffers??

 

Easy asnswer

 

directors loan

 

has anybody been chasing him for this money

 

insolvency service for example

 

and yes

 

hiding is not the answer as ive been there myself

[Master Chief]

Thanks postggj, really glad you picked up on this as I have a lot of respect for your posts on here.

 

He left the company in the hands of his accountant to wind up, but seems to think that she didn't deal with it, because she thought she wouldn't be paid.

 

He is not sure who has been after him or anything really because he moved several hundred miles away and has had no contact with anyone since.

 

Good news about the loan, but what about the van?

 

Thanks ,

 

MC

[postggj]

its a company assett, he can sell it if he wants to as long as its not deliberate fraud

 

a friend of mine sold his van when the company was going tits up to pay his secretary

 

has he checked his credit file recently

[Master Chief]

Ok, that's interesting.

 

He hasn't checked anything, he is monarch amongst Ostriches!

 

I'm trying to get him to resolve all this, but I think until he is sure of no major reprisals he will continue to remain a ghost.

 

I want him to check his file, CCj's etc, but he does not want to give his location away. I'm prepared to act as his agent, although not sure how I can without giving an address. Obviously I'm not keen on having to deal with the likes of DCA's etc phoning here, but will if need be. Funnily enough they no longer scare me since joining CAG.

 

How can we proceed to get his credit file etc. without divulging his location, or at least initially?

 

EDIT: I believe he used the proceeds of the van personally!

[postggj]

I would advise getting a third party to do a credit check on him

 

past business friends for example so he does not have to give his present address, only his previous

 

tell him to come out of his shell and face up to the debts

 

i did it for six years

 

i had three ccj and 4 defaults and wityh the help of cag got the lot removed

 

nothing is ever that bad

[Master Chief]

Thanks postggj.

 

His personal debts are not such an issue I think, all agreements would have been signed a decade ago or more.

 

Can I do a credit check on him or would that not be a good idea?

[postggj]

When did the business fold

 

does he have any personal guarantee on the business debts

[Master Chief]

Struck off & dissolved June 2010.

 

No, original loan that was secured was settled way before things went wrong.

 

Any point in ordering any of the companies house docs?

[Still_surviving]

MC

 

Have you done a Companies House check on the company recently?

 

Im an accountant by trade, and its my experience that an awful lot of companies are being struck off these days without the usual objection from HM Revenue & Customs.

 

Certainly if his filings at Companies House are two years late, they will have probably applied to have the company dissolved unless there were any objections from creditors. Certainly worth checking

here to see whats occuring: http://wck2.companieshouse.gov.uk/088e2b717da110c248ca2e403c388dc7/wcframe?name=accessCompanyInfo

 

If there were no other shareholders, it is highly unlikely there will be people interested for the sake of £7k. It is possible that he could be taxed on an overdrawn director loan account, but to be frank, that very much depends on whether someone has prepared the final accounts, and even then it would be hard for them to be submitted without him having authorised them.

 

Im not being at all glib about this, but its a measure of the times we are in, that £7k would be highly unlikely to get insolvency practioner interested.

 

Do the company check and see what shows up.

[Still_surviving]

Argh your post crossed with mine as i was typing it.

 

It is 99% certain that your brothers problems with the company are long gone. I would find it highly unlikely that anyone would bother getting it reinstated to the register for £7k.

 

If HMRC were interested in the case, they would have objected to the company being dissolved when the petition was advertised in the London Gazette.

[Master Chief]

Hi SS, really appreciate your time to reply, thank you.

 

Company is marked as dissolved struck off June 2010. I believe the company debts were much greater. He did say that one company issued proceedings, but as neither party turned up it was thrown out.

 

ty

 

MC

[postggj]

To be honst

 

tell him to come into the light

 

he has nothing to fear

 

we can deal with any dca but as its a ltd company with no personal guarantee then he is laughing

 

the business over poss fraud realy is stretching it to the limit

[Master Chief]

Thank you so much or your advice, this could make all the difference to him and the rest of the family can relax a little. TBH, we were all getting very worried for him!

[postggj]

every one on cag will offer help and support

 

we are all one big family as we have all been there

[Still_surviving]

MC

 

Im not saying what your brother has done is morally correct, but the company is dissolved now and he should try and rebuild his life.

 

Ive recently seen two clients that i had to stop acting for (such was my discomfort with the directors conduct) get liquidated / dissolved and there was barely a murmur from Revenue & Customs. The sums involved would have been way in excess of what you have been talking about.

 

We are in exceptional times, and unless serious misconduct / fraud can be proven, many companies are going down with far less of a fuss than in previous years. Were there outside shareholders - that is rather important.

 

If there werent, and it was just him trying to earn a living for himself - forget this episode and start dealing with his personal debts.

[Master Chief]

To be honst

 

tell him to come into the light

 

he has nothing to fear

 

we can deal with any dca but as its a ltd company with no personal guarantee then he is laughing

 

the business over poss fraud realy is stretching it to the limit

 

So unlikely he will have any criminal charges brought?

[postggj]

very unlikely

 

tell him to get that notion out of his head and rebuild his life

 

the sooner he starts the sooner its over

[Still_surviving]

MC

 

It is incredibly unlikely that anything remotely criminal would be relevant to this kind of thing. The only time HMRC get involved in these kind of situations is if the directors have been wilfully acting to defraud the system over a lengthy period of time. This normally means not paying PAYE and VAT over a LONG period of time, and even then they would have to prove intent.

 

I hate to be blunt, but unless the debts were much higher than you have suggested, or your brother has done stuff he isnt telling you, no one is going to be remotely interested. Especially as there are no funds to pay for any practioner to sort out the mess.

[Master Chief]

Posts Crossed - in response to postggj

 

Absolutely, exactly what I what I was trying to tell him.

 

Just hope I can convince him!

 

Thanks postggj & SS, you could just be the fourth emergency service lol

[Still_surviving]

One further thing....on the Companies House page that comes up for your brothers company, click on the link to the right that says "Order Information on this Company"

 

The resulting page will show a list of all the filings for the company, the most recent of which will show under what process the company was struck off/dissolved.

[Master Chief]

Compulsory Strike Off. Or DEF6.

 

I ordered the last three docs, didn't really say a great deal. But looks like the first compulsory strike off was suspended then the second and then aftrer 3 months it was desolved.

 

Not really sure what all that means though!

[Master Chief]

Any point in doing a Registry Trust search on the company? Or because it is dissolved there is no point?

 

MC

[Still_surviving]

A compulsory strike off means the company was dissolved for non filing of accounts - however the fact that it has been dissolved means that no creditor objected to this happening.

 

A couple of other things came to mind after I went to bed last night (sad I should be thinking about CAG eh lol)

 

1. Was your brother filing self assessment tax returns while a director of the company? If so, and he has not kept up to date, the Revenue MAY have estimated some liabilities. This will need to be dealt with properly, so contact a local accountant IF and when this happens.

 

2.This is highly unlikely, but check the register of disqualified directors to see if any action has been brought against your brother. This is very very unlikely given the circumstances, but worth checking.

 

 

Keep in touch

[Master Chief]

A compulsory strike off means the company was dissolved for non filing of accounts - however the fact that it has been dissolved means that no creditor objected to this happening.

 

A couple of other things came to mind after I went to bed last night (sad I should be thinking about CAG eh lol)

 

1. Was your brother filing self assessment tax returns while a director of the company? If so, and he has not kept up to date, the Revenue MAY have estimated some liabilities. This will need to be dealt with properly, so contact a local accountant IF and when this happens.

 

2.This is highly unlikely, but check the register of disqualified directors to see if any action has been brought against your brother. This is very very unlikely given the circumstances, but worth checking.

 

 

Keep in touch

 

 

Thanks SS,

 

He doesn't show on the register at all; is that a good or bad thing?

 

I'll check as regards how his tax matters were dealt with.

 

EDIT: His personal tax affairs were dealt with via PAYE. He had a visit from the tax man before he moved and around £4k was demanded in employers liability tax (he thinks). Which was duly paid.

However, my brother says that the same man came back some time after, although he wasn't there at the time (I guess his landlay told him). But this would have been before the company was dissolved.

 

I think his main concern seems to be corporation tax?

 

Thanks & sorry for keeping you awake

 

MC

Edited November 27, 2010 by Master Chief