Company was formed and dividends paid to "B" share holder since company was formed. Company is now ceasing to trade and no profit has ever been made. Two questions;
1. Are HMRC likely to be interested in this when they are advised the company is being wound up and struck off?
2. Will Companies House / Crown solicitor be interested in this at all?
Any advice much appreciated.
Replies (2)
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Depends of course
If the company is insolvent the illegal dividends can be pursued on behalf of creditors. If the company is solvent it is up to the company directors to decide whether to pursue the illegal sums.
Just a thought, I assume the recipient paid tax on the dividends, if so, recovering the illegal dividend should reduce their self assessment and enable a retrospective recovery of excess liability in the past 4 years - claim before 5 April to maximise this.
Anyone else any other thoughts?