I have a Limited Company client (Sole Diectors) who stopped paying me the monthly fee in February when Covid-19 hit. He had lost his only contract so sympathised and perhaps foolishly said you can stop paying me for a while if that helps
I have been applying for his CJRS claim each month. He had been a long standing client and was glad to help. Didn't charge him extra for CRJS.
He is currently in America and think he is intending to relocate permanently there. Not working, short of money and in debt
I have sent a few emails about payment but that has been ignored
Now, its coming up to end of November and the deadline for CJRS is 14th December. I am in a little quandry as I know ultimately he will pay all outstanding debts.
If I don't apply for his November CJRS then probably will get annoyed, have even less money and maybe will not pay anything.
I think it will take him a while to get a contract and start working again be it in US or UK. His accounts and tax filing is due in the next couple months He did hint that he intends to close down the UK company.
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I would tell him he needs to make a reasonable payment towards the debt before I did anymore work. If you were employing someone you would have to pay them to do all this work for him, so it shouldnt be any different.
It puzzles me why you think it's OK to in effect lend him money when he is unlikely to be able to pay you back soon. It's not commercially sound and it won't end well.
It's easy to get oversympathetic with clients.
We're in business to make money and if clients can't afford a service, we should be warning them clearly that without regular payments we won't be providing that service. All my clients (lovely people that they are) are well aware that I expect them to pay my invoices on time or they won't get the work done.
This client will happily bleed you dry if you let him.
Start changing your tune now. He may just disappear, but would have done that anyway.
The only time you are going to get any money is if you have a hold over him.
A "can you please bring your account up to date before i file this" email today should yield some cash.
Don't blink first.
Put it to him that he is going to be even more in debt if ht doesn't settle up.
I have known him for a while and is a friend of a very good friend of mine
A friend-of-a-friend, with no money, who is emigrating to USA and shutting down his uk company (and hence presumably his need for a uk accountant). Is that accurate?
Personally, I’d be surprised if you did get paid.
"I have known him for a while and is a friend of a very good friend of mine"
That has never worked for me.
But if you want to work for free its your choice.
He can always apply for a BB loan and pay you with it. Seeing he still has someone on furlough presume the business still exists.
We all do this sort of stuff, and likely to regret
Directors promise all, But change their mind
If he intends to settle up then get agreed in writing that he accepts liability for company debt to you
Why should a share holder pay the debts of an insolvent company
If relocated, even a proper personal guarantee is worthless
Is there a real job being protected
If they are not UK resident then I don’t think having a UK payroll works. If the company has ceased trading then I wouldn’t be running a payroll in any case.
If they are relying on the CJRS money and it stops then I am sure they will be in touch fairly fast! Up to you if you tell them you aren’t processing November unless they bring their account up to date or if you say that it is not viable/they are not eligible now they are not coming back to the UK.
Last time I looked a director could not put himself on furlough but I do not do furlough's as (fortunately) none of my clients needed too.
You cannot claim if the company has ceased trading.
Generate business whilst on furlough in the USA. Come on this is all beginning to sound very dodgy.
You know your client but, as an objective observer, I don't read your post and immediately see how you can conclude "I know ultimately he will pay all outstanding debts".
If you do believe that, then there's nothing much to worry about. If someone owed me money, had none and was planning to move continents, I'd be concerned.
You owe the bank £1 .
You have a problem.
You owe the bank£1m , they have a problem.
I doubt the client is as concerned as you with this arrangement.
A good client would be in touch and offering something.
However we are in challenging times and the former courtesies may have slipped
I suggest a polite formal letter to put some structure into the arrangement.
Inviting client to agree to the generous terms on offer.
Client may actually welcome this.
Let us know how this progresses.
Wish you success.
You owe the bank £1 .
You have a problem.
You owe the bank£1m , they have a problem.
I doubt the client is as concerned as you with this arrangement.
A good client would be in touch and offering something.
However we are in challenging times and the former courtesies may have slipped
I suggest a polite formal letter to put some structure into the arrangement.
Inviting client to agree to the generous terms on offer.
Client may actually welcome this.
Let us know how this progresses.
Wish you success.
Does he owe the airline and any hotels for his trip to the US - thought not. He isn't that poor then. I would question whether he was entitled to CJRS if he has been in the US for a while and there is a question mark over him returning.
I would too and mentioned this above.
Tax wizard - you seemed very concerned about a client claiming a BB loan off their own back and wanted to report them so how have you got comfortable in making these claims yourself?
"They will be economical with the truth to ensure maximum gain."
That statement by itself says it all.
Similar position. Client was in hospital due to covid back in March. Hasn't worked since. Have claimed for him but year end was due last Feb, SA going to be due by Jan. No vat returns have been filed since Feb either. I have explained he will most likely face a strike off if it isn't sorted. And confirmed how much is still owed. No attempt at making any sort of payment. But did receive an email asking if there's any grants available for new business ventures.
Im considering informing him now that some sort of payment needs to be made before any further claims are processed. I sympathise but can't keep working for free. The fact he wants to start a new business says to me he's possibly able to work but is choosing not to. Which doesn't sit well with me when fees are owed.
He DOES have money - the money you are claiming on his behalf from the CJRS. He just chooses to keep all of it, rather than meet his obligation to you, as you are not pressing him for it.
I would tell the client that I have stopped work and will not continue until the account is brought up to date.