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Folding company

Very concerned.

Hi. A close Friend has had to fold her company and is stressing out.  She can’t pay her vat bill and has had to resort to folding the company and is very worried about what will happen.  She’s sole director of the ltd company and is wondering how limited the limited liability actually is.  Wether or to what extent the vat people will come after her. Any advice will be greatly appreciated. 

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08th Nov 2017 19:17

If she's formally sort advice from an Insolvency Practitioner, have they not discussed this with her?

If she has not sort such advice, she needs to do so immediately.

If you want a recommendation for an IP, PM me. I am not connected to my recommendation other than I've sent dozens of clients his way over the years and found him to be very good.

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to James Green
09th Nov 2017 10:07

sought

SC

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By Theheed
08th Nov 2017 19:30

All she’s done so far is speak with her accountant who has informed her that basically and I mean very basically that if you’re a ltd company she need not stress that much.

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By Ruddles
to Theheed
08th Nov 2017 20:05

As an accountant, I distance myself from such flippant and misleading ‘advice’

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By Theheed
to Ruddles
08th Nov 2017 20:11

Thanks.

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08th Nov 2017 19:36

The cash to meet a VAT bill comes from a company’s customers. What has happened here that the cash they paid is no longer available. If your friend has borrowed it and can’t now pay it back (to the company) that is where I can see troubles ahead for her.

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By chatman
to johngroganjga
10th Nov 2017 11:07

The company might have had bad debts and not been on the cash scheme.

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By Theheed
08th Nov 2017 19:49

She’s been chasing her tail trying to pay off debts built up from trying to keep the business going and hit a brick wall. She’s a single parent with a full time job who’s been trying to run this business with inept staff / managment and she’s ended up in a rather difficult hole

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to Theheed
08th Nov 2017 19:50

So you don’t know what she did with the VAT money?

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By Theheed
08th Nov 2017 19:59

She’s had to pay wages, supplier bills rent, utilities etc etc.

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to Theheed
08th Nov 2017 20:06

So the company was losing money and she dipped into the VAT money to pay other bills?

As long as she has not borrowed money from the company she is probably safe.

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By Theheed
to johngroganjga
08th Nov 2017 20:17

She’s not borrowed as there’s nothing to borrow apparently and I believe her on that. She’s panicked and paid the wolves at the door as they appeared along with haemmorrhaging running costs. I find her accountant either a bit blasé or extremely confident in practising tightrope style attitudevti debts. He’s said to her that some accountants work for the government and some work for the customer. Latter being his attitude. I’m concerned for her ???

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to Theheed
08th Nov 2017 22:39

When the dust settles you'll find your friend has actually taken a wedge from the company.

People always do. I do. It's human nature.

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to Kim Jong Un's Hair
09th Nov 2017 06:00

Kim Jong Un's Hair wrote:

When the dust settles you'll find your friend has actually taken a wedge from the company.

People always do. I do. It's human nature.

It's true!

Client "no, I never took anything out of the company for myself, in fact I'm out of pocket"

Accountant "what was this 3k payment to Static Caravans R Us Ltd for on the 9th and these cash withdrawals totalling 4k"

Client "ah that was a deposit on the caravan in Wales and the rest is just bits for me".

Accountant "no, that was the vat money that the company cannot afford".

Clients are an entertaining species ;-)

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to Manchester_man
09th Nov 2017 09:03

Haha, I was just thinking exactly the same thing!

Clients do have a tendency to believe what they want to believe, no matter how much of a fantasy it may be.

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to Mr Hankey
09th Nov 2017 10:01

It is bizarre. The client will say, 'No, I didn't take anything' as if that shuts down the debate and any further questions on the matter would be terribly impolite.

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09th Nov 2017 09:08

If your 'friend' just had a rubbish business, lost money hand over fist and neither her, not anyone else in the family ever took so much as a £1 out out of it she is fine.

If on the other hand if at the end of the week she took all the cash out of the till as "pocket money" and spent the afternoon in the betting shop blowing it all, she has a situation.

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09th Nov 2017 10:31

But in the end, the balance of probabilities, is that her accountant is probably right. There will be no repercussions for her.

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By djn24
10th Nov 2017 09:53

In my experience, she fills in a DSO1, circulates it to everyone the company owes money with a letter stating that the company is insolvent and can;t afford to liquidate the company. The companies will realise that they will never get paid and just forget about it.
3 months after ceasing send in the ds01 and problem solved.

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10th Nov 2017 10:46

How long had the VAT been a problem?

My advice is to avoid your making any comments until you are satisfied that no money except salary was taken from the Company.

Most insolvency practioners will discuss the problem on the phone for free so my advice is to call or email one with her problem

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