Getting rid of an unwanted company

Getting rid of an unwanted company

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We are dealing with a company which has failed to file accounts for a number of years and Companies House is now wanting to close it down.  This all seemed to follow the normal process until HMRC sent a letter saying they would object to the striking off.  The company had not filed tax returns either and had incurred automatic penalties which HMRC wants paying.

The question is whether HMRC will change their stance if they realise that there is nothing in it for them - a company with no assets cannot pay fines - or whether they will insist the company stays on the register forever clocking up additional late filing penalties.

Is there any other approach to this which might improve the situation?  I have read that the directors could all resign in which case there is no responsible person for HMRC to chase for any debts.

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By refs8
29th Aug 2012 12:24

Agree

We have a few of these cases and in time they do go. Patience I think is the nature of this one and keep telling them the same story and it does eventually go away. I would resign the directors also.

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By Carlos_Fandango
29th Aug 2012 12:34

You can see HMRC's point.

I guess all they want to know is that the company has no have profits on which tax is due.

Currently it appears no accounts or tax returns have been submitted (or are at least several years in arrears) so, HMRC cannot even look at the history of the company to review previous profits.

Although no money is in the pot to bring the company up to date, if I were the Revenue I would expect something, even if an Excel prepared balance sheet at the end.

Following that, expect an enquiry into the directors/shareholders tax returns, especially if they have had dividends from the company (out of currently untaxed profits!)..........

 

..........or just walk away from the job as there's no fees in it, a lot of hassle and no thanks.......and the client sounds like a nightmare!

 

And yes, i've heard all the directors could resign so there's no-one to chase - legal (I guess), not very ethical and it does leave a bad taste in the mouth but, best for the directors I suppose!

 

 

 

 

 

 

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By ShirleyM
29th Aug 2012 12:43

It's about time

So many tax dodgers start companies, dodge all their responsibilities and avoid filing anything at Co Hse or HMRC, but still pocket the profits tax free. It is so easy to just start a new company once the existing one has been struck off, and repeat the exercise ad infinitum.

I am not saying that is what happened here, but it's about time that HMRC and Co Hse got off their backsides and stopped this sort of tax evasion.

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By refs8
29th Aug 2012 12:43

Are we looking after HMRC or the client I would ask?. For me the client and as long as what we are doing is lawful and in the public interest - after government sets law not us.

If I was unhappy with the way the clients had acted or come to this position then I would resign

Always an interesting debate.

 

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By ShirleyM
29th Aug 2012 13:03

Is it lawful?

To not fulfil the directors responsibilities, or declare profits?

People get away with all sorts of things, but that doesn't mean it is lawful. It just means they haven't been caught, or the 'powers that be' can't be bothered pursuing it.

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By ireallyshouldknowthisbut
29th Aug 2012 13:55

.

Do they own any tax?

PAYE? VAT? CT?

Have the director's taken untaxed salaries dividends from the business?

Have the director's got form on this, ie have they done it before?

Could be a lot more to this than meets the eye....

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Teignmouth
By Paul Scholes
29th Aug 2012 14:04

Agree

With Shirley - Having banged on about this during the ESC C16 debate last year, it is refreshing to see HMRC bother to put their foot down, there were (and maybe still are) thousands of companies a month being struck off having filed nothing, whilst we all wasted out time f**ting about with debates over ESC C16 procedures.

Put our minds at rest Huw, is it OK to assume that the company actually had no CT liabilities?

With Carlos - In a similar couple of cases I dealt with I just sent them rough P&Ls over the 2-3 years to show that there were no profits to tax and said that there were no assets with which to pay our fees to prepare formal accounts or returns.  HMRC were then happy not to object to a strike off.

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By bernard michael
29th Aug 2012 14:56

Your should not forget that directors' prime repsonsiblity is to the shareholders to look after their interest

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By ShirleyM
29th Aug 2012 15:08

I wonder why there is such inconsistency?

There are lots of people who register for self-employment, but don't submit tax returns, and these people get a tax assessment, penalties, and all the rest. We have had our share of these walk through our door.

I wonder why a similar monitoring scheme cannot be set up for companies?

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By refs8
29th Aug 2012 22:34

I totally agree with ShirleyM here.

As you say lawful is an interesting word.

If companies house and more HMRC got there act together this would not happen and they policed is correctly.

We should always do what is in the best interest of our client, unless you feel uncomfortable with what they are doing, then if so walk away and resign.

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By petersaxton
30th Aug 2012 07:50

I agree that Companies House should do more

Going back to self assessment I had a client squealing because he wouldn't give me the information to file a tax return for several years and now he's received a penalty of £1,200. He said it was scandalous as there was no tax to pay. I asked him how HMRC were supposed to know that if he didn't submit tax returns?

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