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Advising 'tricky' client...

A client of mine that has been a good, clean client declared dividends of circa £50k in his last accounting year, and Corporation Tax was £15k. When I told him the tax bill he said he had 'missed' expenses, and ultimately after conversations he said the company was no longer trading, that he was taking am employment contract instead.

My issue is that now, he said he cannot afford to pay the CT - is it likely that HMRC will take action against him, or will he be like many others who seem to start new companies often to deliberately avoid taxes?

I don't have any personal experience in this situation and would appreciate any advice.

Lorraine

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14th May 2012 12:33

Insolvency Practitioner

If he is looking to you for advice I would point him in the direction of an Insolvency Practitioner. Its not something that you can advise on. If he has simply shut up shop I would imagine that HMRC would be chasing him for the debt. Traditionally directors have done nothing and let Co House strike them off so the debt dies with the company but recently I've noticed that HMRC have been stopping strike offs. Did the Director have an overdrawn directors loan account that HMRC could possibly challenge and what had happened to the money he was going to use to pay the Corp Tax? 

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