Old Limited company PAYE

Old Limited company PAYE

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Accounts were done for this company up to 31 January 2008 when my share was bought out.The final accounts  weren't filed at HMRC or Companies House and in November 2009 the company was dissolved.My ex co- director transferred all the assets to another company and did not trade through the old company - the company which both of us were joint directors/shareholders.I put through my expenses for the business, some of which were attributable to my own limited company, plus a salary of no more than £2,000 per year.I had also invested about £35,000 to £40,000 in this business,before it became incorporated, and it's only trading period,whilst unincorporated, it made a loss of about £40,000.My investment was put to my Director's loan account and the loss was introduced as goodwill shared equally.I never got repaid any of these sums when the other director was buying my share, in fact he threatened to take the clients himself and he already had another accountant ready to take on the role.I personally was on the edge of bankruptcy and was in the position of negative equity with the property I owned.I literally had no money and couldn't borrow to take solicitor's action against him.He then bought my share of the business for £25,000, he whittled me down from £45,000, and to pour insult on the wounds he never paid the remaining £10,000 purchase fee, he paid the initial £15,000 and gave me a cheque for the second instalment of £5,000 which he then stopped.Since then I have used the expenses that my company should have incurred and treated them correctly in my own limited company accounts.I am taking him to court for the stopped cheque for £5,000 and have been advised by a solicitor that I will win the case.He is likely to challenge this and this will mean he will issue me with a writ to claim damages so I am reworking the 2006,2007 and 2008 accounts so they have only my attributable expenses set against the income of that business.I am going to pay £1,000 to Companies House to have to company undissolved.From 6 April 2005 I put through on payroll software my actual hours worked for the business,I was the only working accountant in the business apart from a couple of freelances,at a rate that was agreed between the two of us.I am intending to refile the 2006,2007 and 2008 PAYE returns and my own self assessment returns which shows the limited company in debt to HMRC and will make no difference to my returns.The amount owing to me on my directors loan account will be about £15,000 more than originally shown as he took action to get back £10,000 of the original £15,000 paid to me and I paid of the VAT creditor of £5,000 personally.The company will also be in debt to HMRC because my ex co-director owed the company ,on his loan account, about £25,000 including the £10,000 I refunded to him.

Could someone tell me whether the HMRC will ignore these revised accounts,PAYE and corporation tax returns or ask him to pay these taxes or both of us jointly.Also is there anything I have overlooked that the HMRC might do in relation to these matters.I am hoping to use these accounts as my defence to any counter claim,for damages, that my ex co-director may bring against me.if I get my £5,000 paid to me I will then decide to have a go at him or limited companies for the payment of all other sums owed to me.

Replies (14)

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By Jack Spratt
18th Apr 2013 17:21

I respectfully suggest that you find a good accountant and pay him or her for his or her time in unravelling thus fairly complex problem, which I assume from the fact that you have posted it you feel unable to deal with yourself.

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Replying to GW:
By [email protected]
18th Apr 2013 17:50

PAYE opinion needed

Jack Spratt wrote:

I respectfully suggest that you find a good accountant and pay him or her for his or her time in unravelling thus fairly complex problem, which I assume from the fact that you have posted it you feel unable to deal with yourself.

I would do if I could afford it.All I want is an opinion of what someone thinks the HMRC might do if faced with PAYE debt of in the region of £20,000 relating to periods of 6 to 8 years ago.If no one can give me an honest opinion I will go straight to the organ grinder.HMRC themselves.

 

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By Tosie
18th Apr 2013 21:57

Paye

There is legislation that allows hmrc to ask a director to make good paye debts that relate to his/her personal liability.However I have never seen it used and from your posting the debt is not yours. If the company is struck off that will be the end of it.The revenue can object to the striking off but I doubt if they will in this case.

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Replying to SteveHa:
By [email protected]
18th Apr 2013 22:14

PAYE

[quote=Tosie]

There is legislation that allows hmrc to ask a director to make good paye debts that relate to his/her personal liability.However I have never seen it used and from your posting the debt is not yours. If the company is struck off that will be the end of it.The revenue can object to the striking off but I doubt if they will in this case.

[/quote)

The company was struck off in 2009 and I am paying to have it put back on the register so I can challenge the other director for evading paying me off as a creditor of the company and transferring all the assets to another company under his and his wife's complete control..I resigned as director on 9 February 2008 with the company owing me about £40,000 and HMRC owed £20,000.These figures are estimates at the moment as I have only started on the preliminaries of the accounts revision.

 

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By Jack Spratt
19th Apr 2013 06:43

eh?

So you can't afford to pay an accountant to sort out the tax mess but you can afford to pay to have the company reinstated so that you can challenge the other former director?

 

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Replying to stepurhan:
By [email protected]
19th Apr 2013 10:50

REPLY

Jack Spratt wrote:

So you can't afford to pay an accountant to sort out the tax mess but you can afford to pay to have the company reinstated so that you can challenge the other former director?

 

I think you have missed the point - I am a qualified accountant and all I need is an opinion of whether HMRC would take action over a 5 to 7 year old debt for PAYE of £20,000 and if they did would it be against the director's that dissolved the company or against me and the director who bought the business? I will be paying for company reinstatement on credit card loan.

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By Tosie
19th Apr 2013 07:18

debts are company

Debts are company's and as stated would not become personal unless it can be proved that the directors acted illegally. To prove this would cost a lot of money and HMRC would weigh the cost against the likely results and in this case unlikely to take any action.

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Replying to Matrix:
By [email protected]
19th Apr 2013 10:27

debts are companys

Tosie wrote:

Debts are company's and as stated would not become personal unless it can be proved that the directors acted illegally. To prove this would cost a lot of money and HMRC would weigh the cost against the likely results and in this case unlikely to take any action.

 

The assets were transferred to another company to avoid paying me.These assets were over £50,000.The other director owed me £10,000 on purchase of client list.

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By [email protected]
19th Apr 2013 10:44

Reply to Tosie

HMRC continue sending me statements and adding interest on the PAYE debt of my limited company that was dissolved 18 months ago.They owed the company VAT and their office refused to transfer repayment to PAYE office.The amount involved is about £6,000 in each case, although with PAYE return being done online the figures went haywire and ended up over £14,000.The only thing the HMRC haven't done yet is send in Rossendales or whoever they use to chase debts.

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By macaulay147
19th Apr 2013 11:11

Was it the company or the director that bought your share of the business for £25k?

I am assuming it was the director as it sounds like the company would not have had the funds to do so.in whcih cast it is not the company which owes you the £10k but the director.

If the company owed you any money then the time to have acted would have been when the company was being struck off. Companies are required to inform any creditors witihin a week of lodging form to strike off. Was this done, if so then I am not so sure you would be successful in obtaining the moneys owed.   

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Replying to andy.partridge:
By [email protected]
19th Apr 2013 11:46

Reply to macauley

macaulay147 wrote:

Was it the company or the director that bought your share of the business for £25k?

I am assuming it was the director as it sounds like the company would not have had the funds to do so.in whcih cast it is not the company which owes you the £10k but the director.

If the company owed you any money then the time to have acted would have been when the company was being struck off. Companies are required to inform any creditors witihin a week of lodging form to strike off. Was this done, if so then I am not so sure you would be successful in obtaining the moneys owed.   

1) It was the director

2) I will go to court to get judgement against the director for the £10,000.He is likely to counterclaim because of some of the sums which were paid to me,the accounts showed expenses which were attributable against its business and also expenses which should have been set against my business run through my limited company.My salary was put in low,even though I kept files for PAYE returns which were never submitted with actual hours,matching time sheets, multiplied by actual agreed rate per hour.These expenses were eventually set against my limited company and now,prior to court case,I am correcting the joint limited company's accounts with actually salary put through and my company's expenses removed.The joint limited company will be reinstated prior to filing at Companies House and HMRC.

I wasn't told that the joint limited company was to be struck off.If I cannot get moneys owed repaid to me because of cost of action against that company then it would please me as much if the HMRC were successful in getting the PAYE debt paid to them by my ex co-director because matched with the fact that he isn't an accountant,and other people do the work for him and that his company has lost a lot of clients, it would probably see him go bankrupt or insolvent.

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Replying to lionofludesch:
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By macaulay147
19th Apr 2013 12:19

It seems like you are going to a lot of trouble to get even with the other director. I would be concentrating on getting my £10k from the director rather than opening up the company again.

I agree with Tosie that the debts are those of the compny and not the director and feel you will end up even more frustrated if you follow this all the way and dont get the 'justice' you deserve. 

 I believe you said you resigned from the company before it was struck off and so I would be raising the issue of whether the other director had acted appropriately in having the company struck off and fulfilled his requirements as a company director.

http://www.companieshouse.gov.uk/infoAndGuide/windingUpCompany.shtml

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By pauld
19th Apr 2013 12:13

PAYE

I had a client in a situation where HMRC were chasing director for unpaid PAYE for a company that had been dissolved two years previously. It was only about £3,000 and when I wrote to HMRC informing them that the company no longer existed they stopped chasing the director.

Therefore my understanding was that PAYE is a company debt not a debt of the directors.

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By Tosie
20th Apr 2013 07:18

You are victim of injustice and maybe fraud but............

Obviously I am not the one who has lost the money but I think that you need to be careful before attempting to resubmit accounts.The other director will challenge there accuracy and you may find yourself with more and more expenses and time consuming correspondence

.

You say the other director has sold the clients on to another accountant I assume you have checked the ethics and legal situation of the other accountant's involvement.

Good luck with it all.

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