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Mounting debts

Mounting debts

Hi, sorry for the unusual posting style my 'enter' key has stopped working! A prospective new client has been royally turned over by one of her former accountants - a second Accountant (Bookkeeper really) has fixed the situation in terms of bringing returns up to date (2 years of VAT returns for example) and the bill/fines have now landed! We assisted one of her friends in negotiating with HMRC on APN's and Settlement Notices so have been introduced.  There is no money to be made here but the guy who introduced us is a significant introducer so we want to help.  The outstanding bill is made up of unpaid VAT and Corporation Tax from a company in which the client is 100% shareholder and sole director and although I haven't seen full site of the books or accounts the money must have been paid as dividends (although struggling to see how there isn't a s455 under these circumstances).  She has verbally agreed to pay this back and HMRC have been very threatening in enforcing this agreement.  My question is simple; although I have never before suggested it to a client could she not just pay what she can afford and wait until HMRC are either a) paid off or b) forced to make the business insolvent and she is pursued personally for any loans/incorrect dividend payments by the IP?  This would at least have the benefit of giving her some breathing space to raise the money and (although unclear on this point) would only be to the extent of the dividends/s455 drawn and would not include the fines as they would attach to the company. From her personal point of view a) how much time would this be likely to buy and b) would the IP be likely to give her a sensible time scale to pay the bill (she has two rental properties that she does not want to lose)? Finally would she be likely to get a more generous and longer time to pay if this options was discussed with HMRC in advance?

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04th Mar 2016 14:09

Copies of Accounts

Could you not get a copy of the accounts so you are able to whether the reason for the lack of funds is down to a directors loan or some other reason? That would give you some idea how to proceed.

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04th Mar 2016 16:52

Copies of Accounts

I will - just not sure I want to get engaged at this point..the e mails I have seen only make reference to CT and VAT, nothing about Directors loans at all. I think the company will go - then it is a question of whether the IP is likely to be more or less generous than HMRC in terms of time to pay. She doesn't want to let the company go owing £40k and have the IP come after her houses because they can. IP versus HMRC (rock and a hardplace I fear)

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By zebaa
04th Mar 2016 14:41

You are in the dark...

...until you know the full facts. So first thing is to find out.  My further thought is it might be best to let the Co go and she pays whatever she owes the Co.

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04th Mar 2016 17:34

Speak to an IP

A good IP will help get the best solution for your (potential) client.

If I were in your position I would get appointed as their adviser, discuss the matter in principle with an IP to give them the 'heads up' and then get as much up to date information as you can - accounts, CT and VAT liabilities.

Far better your client appoints an IP than wait for HMRC to wind the company up.

I've had similar situations for clients, where they have acted promptly the IP has managed to get them a workable solution.

I can put you in touch with a good IP if that helps.

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By qhas
05th Mar 2016 14:20

IP
Had a client recently in much the same position, in fact worse. They used LA Business Recovery based in Uxbridge and the
Senior Partner pulled off a blinding success. But shop around. There must be others,

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