Last year I took on a sole trader client. He already had a VAT inquiry as he should have previously registered. Head in the sand type and no previous agent.
The Inquiry has raised a VAT debt of circa £15K plus penalties (no scope for reducing, all correct) plus he hasn't paid any of the VAT quarters I've subsequently calculated.
The business, while profitable, certainly doesn't give a living income and tax credits are claimed. When it gets to the point of HMRC enforcing the debt, he would end up being bankrupt. In view of the debt and business conditions, he has now taken employment elsewhere (to start 1st March)
His father, who did work for him, wants to carry on the business albeit under a new name. Running it by himself (and with a clear head) he would be more successful in his view. He would have solicitors draw up an agreement to transfer the assets.
What are the implications to the original owner? I don't see how the debt is written off just because he ceases trading??
With regards to the new owner, I assume he cannot be chased for anything?