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Objection to Company strike off by HMRC - what next

Objection to Company strike off by HMRC - what...

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Hi

A client ceased trading through his limited company in Oct 2011. Now HMRC are objecting to the Strike off application by Companies House, and demanding payment ot outstanding amounts, despite being advised of the situation by us and that we no longer act - obviously wouldnt get paid!

What is the process now, what is likely to happen?

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By karen.morriscook
13th Mar 2013 14:18

If there are outstanding amounts the Revenue will always object to the striking off.

If it is unlikely that there will be any profit in the last period of trading I tend to write to the Revenue and ask them if they would just accept a no profit no loss assessment on the grounds that the company could not afford for me to do the accounts.  If there are no other outstanding amounts they will often accept this and allow the subsequent striking off.  But if there are outstanding amounts the Revenue will probably start bankruptcy proceedings anyway.

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By murphy1
13th Mar 2013 15:22

Ltd company debt was £15k,

Ltd company debt was £15k, but no further trade, income or assets to repay this with

 

No director loan although the director did take legal dividends in the last year of trading.

 

Would they potentially pursue him?

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By Manchester_man
13th Mar 2013 19:36

Are you asking
... out of interest, as you say you no longer act for the company?

I would (if I was the client or I was acting) write to hmrc explaining that there are no funds or assets left in the company which could be liquified. (assuming this is the case)
and that as there are no funds, a liquidator cannot be afforded, but invite them to initiate their own liquidation of the company.

Then leave it and wait.

They will either write off or instigate liquidation proceedings but either way, they won't get any money, as long as the company is insolvent and has no assets remaining.

As long as the directors have behaved and followed correct procedures then they are safe as well.

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By BKD
13th Mar 2013 20:02

Numbers

You say that debt was £15k (CT due to HMRC?), no assets, yet legal dividends paid in final year of trading. Something doesn't quite gel - exactly what was the balance sheet position after those dividends taken?

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By Sheepy306
13th Mar 2013 21:45

Agree with BKD
Doesn't seem right regarding those dividends.

In any case you're effectively saying to HMRC "sorry, I know we owe you £15k but we appear to have taken all the money out of the company ourselves, it was a dividend though so that's okay".

I would say your client stands little chance of not being pursued, your best bet is that when Companies House automatically try to strike off again in a few months that HMRC overlook the debt and the strike off goes through, which they do sometimes.

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By murphy1
14th Mar 2013 11:56

@fawtlybasis2575

The January question was regarding a different client who thankfully took our advice, spoke to an IP and is now in formal liquidation proceedings.

Re this old client. the last BS prepared at Sep 2011, had over £ 9k of distributable reserves remaining. Debtors, cash at bank and were the only current assets and CT liability and amounts owed to the director were the only creditors.

When he informed us that he had stopped trading we reminded him about his CT liability and his obligations.

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By Euan MacLennan
14th Mar 2013 12:09

Are you saying ...

... that some of the debts proved bad?  If so, the CT liability could be reduced.

Otherwise, with over £9k of retained profits, there must have been sufficient cash to pay £9k of dividend, pay the CT liability and repay the loan from the director, unless he took out more than £9k of dividend, which would be unlawful, or more than his loan to the company, which is probably fraud.

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By murphy1
14th Mar 2013 13:54

Ewan,

 

I only have facts up to  30 Sep, and only that I was advised that the company ceased to trade. Anything else is speculation on my part, albeit we can all guess!

This client was typically a once a year contact and worked outside the UK considerably.

I obviously would not undertake any work without knowing that I could be paid.

My original question was to what was likely to happen next as I have never dealt with this before. Is it likely they will pursue the matter when advised again that the business ceased trade? If so, what are the likely steps taken by HMRC.

The info known is a £15k debt. This may be more is trade was good, or less if debts etc weren't paid to the company.  When I was informed that the business ceased to trade, I advised the client that he should prepare final accounts, do the tax comp, pay HMRC  etc etc, etc, but he clearly not done so.

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By BKD
14th Mar 2013 14:23

Speculation?

You don't seem to know an awful lot about the client, yet seem to know that the diivdends paid were legal. Or was this just speculation? The legality or otherwise of the dividends could be key to whether or not HMRC action is likely.

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By soconfused
03rd Feb 2016 14:57

Striking off suspended

Hi

Please can someone advise, the Company I had ceased trading in April 15 as it was no longer working as we lost the main contract and was unable to pay the bills including CT of £7k the other bills equate to £500  the company had no assets as literally a 1 man band and was advised by our accountant to cease trading as it was failing.  They then they told me they wrote to HMRC and informed them that the company has ceased trading bank accounts closed and no assets, I have had letters from HMRC them chasing for CT spoke to accountant and advised that CH will strike it off and then that will be and not to be frightened by the letters etc etc.  I have now checked on line as its coming up to 3 months to be struck off and there is a notice that striking off has been suspended it does not say by who - please can someone advise what happens next or what should I do.  I have also today had a letter from another creditor requesting payment for £200 or they will start court action - should I contact them and tell them the company has ceased trading.  Not sure what to do - need some help please as all of this is quite frightening and feel out of my depth?

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