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HMRC chasing client for unpaid taxes

Client thinking of liquidating but concerned of long term implications

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Client is a builder sole director of limited company under CIS.  

A couple of major clients have not paid and therefore cannot afford to pay HMRC.  HMRC are putting more pressure.

Maybe forced down the liquidation route.    I read somewhere if he liquidates owing HMRC then mortgage or other lenders will know that he was a director of a company that owed money to HMRC.  If he starts up again then HMRC will require advance payment of tax ? Is this correct ? 

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By Manchester_man
12th Feb 2018 12:14

Never heard of mortgage companies being told the borrower was a director of a company that owed money to HMRC?

Re your second question, they sometimes ask for a bond/security deposit when registering for vat if you have dumped a company/companies owing vat previously.

Not for income/corporation tax though.

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By Grayson Moore
13th Feb 2018 09:35

Manchester_man wrote:

Never heard of mortgage companies being told the borrower was a director of a company that owed money to HMRC?

Re your second question, they sometimes ask for a bond/security deposit when registering for vat if you have dumped a company/companies owing vat previously.

Not for income/corporation tax though.

The last Budget did include provisions to extend the security deposit provisions to include corporation tax so this won't always be the case going forward

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By Jim100
12th Feb 2018 22:25

I just thought with lenders especially how risk adverse they have become may be able to find somehow through their searches that the person whom they are lending may have been responsible in the past for a company that had been liquidated owing money. Perhaps its all done discreetly which may give an overall impression of the individual they are lending too. I wouldn't be surprised if this happens as mortgage lenders tightening up in recent years.

I would also guess that it would put the director more under the HMRC radar.

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By Matrix
13th Feb 2018 10:20

Which taxes does the company owe? Does the company owe you too? Have they taken legal action against the clients?

Sadly companies fail every day, your client should seek the advice of an insolvency practitioner.

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By Jim100
13th Feb 2018 11:11

They have started legal proceedings but takes too long and the big bad wolf is at the door. They have met insolvency practitioners but of course may are just say liquidate without any indication of long term consequences.

I am just interested to know too about long term effects for future clients who get into trouble

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