hmrc was seeking a ccj against my limited company for corporation tax

[s1gar]

Hi all,

 

I received a letter from the county court saying the hmrc was seeking a ccj against my limited company for corporation tax. I owe 19k in total. This has risen over a few years. It started in 2001 when I was out of work for 12 weeks. I foolishly used my tax money thinking I could pay it back. I have chased this ever since and it’s got to this.

 

I honestly don’t know what to do next. I am a one man contractor limited company with no assets.

 

I have been paying the minimum PAYE to get my Ni stamp and taking the rest out in dividends. Now I am scared that if I go into liquidation they can chase me personally. I have tried to catch it up over the years but I would have to re pay it over 2 1/2 to 3 years to make it feasible and something I can realistically pay off. But they won’t have that at all I wouldn’t imagine.

 

I hear of people going into liquidation and I have avoided this for 11 years.

 

 

I am scared of that because it’s a massive unknown for me.

I don’t have the cash to do it voluntary and I need to carry on working after it.

 

 

I don’t suppose you can be a director of two limited companies whilst one of them is going through insolvency.

And what happens with being able to operate as a limited company after insolvency.

 

 

The other thing I am scared of is them chasing me personally for the cash.

Someone who I know has said they could pursue me if they feel the company has been run badly but this is unlikely for the amount owed. Knowing my luck though they will.

 

Has anybody been through this?

If so is there anything I can do?

What do I do with the pending ccj?

And what happens with insolvency and the implications?

 

I honestly don’t know what to do and I have avoided all this for 11 years now.

[Wintry]

Hi s1gar

 

Reading through your post it might be worth giving Business Debtline a look / call

 

http://www.bdl.org.uk/

[s1gar]

Thanks for that I will ring them on Wednesday.

I think I will be forced into the liquidation route but not sure of the consequence’s.

[s1gar]

i could really do with some help on it all though from people who've been through it

[toddle2u]

The problem you will have here is if you have been taking dividends illegally from the company i.e. withdrawing them when there wasn't enough profit to do so. In this instance if this is the case and the company went into a Liquidation you could be asked to pay it back by the IP or OR. The other instance when you could be pursued personally is if you are found guilty of wrongful trading or trading whilst insolvent. Only an IP can bring this action and they will only do so if they think they will be able to get something from it and they have the funds to bring the action from the Liquidation. From what you have said I think this would be highly unlikely and also it is very difficult to prove.

 

With regards to running another Ltd Co after the original Co goes into Liquidation there is no problem with this as long as you have not received a Directors ban (which again takes time). Personally I would cease to trade the Ltd Co as of now due to its liabilities. I take it the company has no assets? You can then either set up a new Ltd Co and trade through that or go as a sole trader.

[s1gar]

So toddle I can cease trading with this company now and deal with the debts etc whilst starting a new ltd company. My accountant is rubbish as well. I ask him what I should do and all he says is well I’ve had the money. I know he is right but it’s the last thing you need to keep hearing when all you want is advice.I cannot go down the sole trader route as the companies I do contract work for won’t allow it.To be honest I want to pay the money back but need to do it over a good few years but they won’t let me do this I would imagine.What’s my next step with this ccj?I have no assets and the only person I have a contract with is the mobile company which I presume I can transfer to my new company.

[sequenci]

Did you call Business Debtline? 0800 197 6026

[s1gar]

doing it this afternoon.i am finishing early so thats my next step.

[sequenci]

doing it this afternoon.i am finishing early so thats my next step.

 

Nice one, they're open 'til 5

[toddle2u]

So toddle I can cease trading with this company now and deal with the debts etc whilst starting a new ltd company.

Yes it is perfectly legal to do so.

 

I have no assets

Does the company have an assets? Remember you are totally seperate to the Ltd Co and so are your own assets

[s1gar]

Yes it is perfectly legal to do so.

 

 

Does the company have an assets? Remember you are totally seperate to the Ltd Co and so are your own assets

 

no the company has no assets.

[toddle2u]

cease to trade it then and let all creditors know you have done this and that it has no assets. The in 3 months time strike it off at Companies House

[s1gar]

cease to trade it then and let all creditors know you have done this and that it has no assets. The in 3 months time strike it off at Companies House

 

I don’t think I’ll get the chance to strike it off as the ccj went to court last Thursday.

 

Apparently it’s not long until they come knocking.

 

I will write to them though and I have ceased trading.Some company rang me today saying they'll liquidate me and it’s a lot easier and won’t leave a mark against my name like (they say) the hmrc liquidating me. anyway they will only charge me 7k plus vat!!!! if i had that i'd give it the hmrc and pay off my debt.

 

What happens if the hmrc liquidate me? I have read on here some person had an interview with the liquidator and it was painful!!!!! This is what I am scared off!!!!!!

[s1gar]

i forgot to say. i rang the business helpline. although helpful they have made me feel worse!

 

it looks as though i have been trading insolvant. the lady on the phone said this will almost certainly mean i will be chased for tax personally. if this happens does anybody know if they will be more flexible on how i pay it back? i am now sh!tting myself.

[toddle2u]

£7K + Vat!!!!!!!! Outrageous!

 

Either way if the company is liquidated by an IP nominated by yourself or the OR you will not get a mark against you personally. If the Liquidation goes to the OR you will need to attend an interview to explain the circumstances of the company insolvency. It won't cost you anything and yes there may be a few awkward questions but hey what can they do - you haven't committed murder!! However, if people have the funds to appoint their own liquidator I would always advise them to do this mainly because it's 'cleaner' and less hassle. If you have only the one creditor you should be able to get this done for £2.5K plus Vat. If you haven't got the funds though let HMRC appoint a liquidator and you will have to do the interview with the OR

[s1gar]

what about them chasing me personally? what happens there?

 

and what does OR mean?

[toddle2u]

Trading whilst insolvent is very difficult to prove and proceedings against you for this can only be started by the Insolvency Practitioner. The IP also needs funds to bring this action and they also need to believe that you have the funds or assets to be able to repay the money for them to make it worth there while coming after you for it.

 

If you think there is a chance of this I would look to appoint your own IP. If you want any recommendations drop me a PM

[s1gar]

toddle have you pm'd me back? i had a email saying i had a message but nothing in my inbox!

[s1gar]

thats the thing i dont have the money or i would pay it. i want to pay it and would if i had it.

 

just had another company ringing me for 'free' help

[toddle2u]

The CCJ will be registered and now public knowledge and listed in the Stubbs Gazette which these firms use. You will now get plenty of these calls and letters. As advised you can still go for the strike off or wait for HMRC to appoint a liquidator and take your chances with the OR

[s1gar]

i have set up a new company and have my letter ready to tell my creditors i have ceased trading. see belowDear Sir/MadamAccount No: _____________________________I am writing to inform you that xxxxxxx Ltd is technically insolvent and hence has ceased trading as of [date and year]The company has insufficient funds and no assets to formally go in to liquidation and hence invites creditors or members to issue winding up proceedings should you wish to do so.If it is not subject to any formal winding up proceedings the intention is to apply for Strike Off under s1003 of the Companies Act after a period of three months from the above date.Yours faithfully

[s1gar]

The CCJ will be registered and now public knowledge and listed in the Stubbs Gazette which these firms use. You will now get plenty of these calls and letters. As advised you can still go for the strike off or wait for HMRC to appoint a liquidator and take your chances with the OR

 

 

i have set up a new company and have my letter ready to tell my creditors i have ceased trading. see below

 

Dear Sir/Madam

 

Account No: _____________________________

 

 

I am writing to inform you that xxxxxxx Ltd is technically insolvent and hence has ceased trading as of [date and year]

 

The company has insufficient funds and no assets to formally go in to liquidation and hence invites creditors or members to issue winding up proceedings should you wish to do so.

 

If it is not subject to any formal winding up proceedings the intention is to apply for Strike Off under s1003 of the Companies Act after a period of three months from the above date.

 

 

 

Yours faithfully

 

i can only apply for the strike off after 3 months i think but i think i'll get beaten to it.

 

toddle is this the right way about going about things?

[toddle2u]

Yes letters fine to go

[s1gar]

i have just had a woman from hmrc calling me.

 

asking for the payment in full.

 

to my surprise i said i would need 2-3 years to pay off what i owe. that wasn't dismissed.

i have to get back to her by tomorrow with what i can afford.

[toddle2u]

Tell her your taking insolvency advice with a view to potentially liquidating the company and see what she says