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Overdrawn DLA on cessation of trade

A client company ceased trading last year.  Despite my suggestion to take further advice from an IP the director simply wants to leave the company dormant, however there is an overdrawn directors current account and an intercompany debtor on the balance sheet, both of which leave the director exposed to the risk of the assets passing to the Crown if the company were struck off for any reason.  There are sufficient reserves in the company to vote a dividend to clear the DLA and the to provide sufficient monies to the other company to clear the inter company balance, but the director is personally not in a position to take the higher dividend rate tax hit and the director is reluctant to throw any further monies at the company anyway. The notional ACT has been paid on the directors loan, but surely HMRC will still want their pennies worth from the director for the beneficial loan interest each year wouldn't they?  In the circumstances can the company truly be dormant as surely the BIK would trigger requirement for P11d's and Class 1A nic each year? Are there any other pitfalls? I have been turning this around in my head all day and would be so grateful for any input from other AWeb members.

Many thanks

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avatar
21st Feb 2012 15:46

Needs clearing up

1. Extend year end so 2. can be done prior to next y/e.

2. pay divi including extra for s455 tax recovery.

3. Use repayment of s455 tax towards the directors tax bill.

 

Could use ESC C16 if company is to be would up, but be quick!

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By Monsoon
21st Feb 2012 16:21

C16

zarathustra wrote:

Could use ESC C16 if company is to be would up, but be very quick!

 

There, I fixed it for you ;-)

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By Jimess
21st Feb 2012 16:33

Thank you - I will talk to my client again.

Kind regards

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