Hi,
It's a limited company where the director took a gamble at the beginning and commit the company to significant advertising cost and vehicle hire charges. Both of these expenses were paid on a monthly basis. The company hired a few employees expecting a significant increase in the demand of their services.
However, because of the monthly commitment to pay the vehicle Hire Company and the Advertising companies, the company has failed to meet its monthly obligation to pay the PAYE/NIC to the Revenue.
So far, the Revenue has not been aware of the potential PAYE liability as director has been submitting blank PAYE Payslip to the Revenue. THe main reason for submitting blank PAYE slips was in the hope that the business would pick up. Unfortunately it has not happenned, where in fact, demand for services has decreased and the company is now facing closure.
As the company has very minimum assets, what would be the repercussions on the director with regards to the PAYE liability and other creditors.
Would the director be held personally liable? If so, what are the likely consequences?
Please answer as soon as possible. Many Thanks
Michelle Harris
Replies (3)
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Creditor's Voluntary Liquidation
How much were the crown owed? Are they the only creditor?
It is true that the director can be made personally liable solely for his own PAYE/NIC, however I have put over 200 companies into Administration and CVL, and haven't seen this once.
You could always enter into a 12 month payment plan, but if the business is clearly insolvent, you should wind it up before incurring further credit.
directors salary only
The director will only be responsible for his personal tax and nic not the employees.
Oh dear!
Michelle
Looking at the worst case scenario, the director has been submitting blank PAYE payslips and this could be regarded as a criminal offence of fraud (see sections 1, 2 and 5 Fraud Act 2006) or false accounting (sections 17 and 34 Theft Act 1968).
You need to consider (if you are an accountant in practice) whether you need to make a report under the Money Laundering Regulations 2007 and s 330 Proceeds of Crime Act 2002.
I would suggest that your client take urgent advice from an insolvency practitioner.