Need to get my head around this before I can either form an opinion as to give general advice or refer on to someone else (latter more likely). Neither Plan A or Plan B is mine although plan A had entered my head.
Sole Trader A has a VAT, PAYE and Machines Game Duty Debt totalling circa £12K. The VAT debt was being paid under an agreement to pay; the agreement to pay has been terminated, in my opinion on a technicality that HMRC did not advise upon at the time, but none the less it has been terminated. A control of goods order is in place for MGD (Circa £3.5K) and one will follow for the VAT and PAYE and goods will be collected to cover the debt, end of sole trader A and 5 full-time jobs down the drain. There were 31 of the 52 weeks of the TPP still to go with no payments being missed.
Chances of getting the TTP back in place are 60:40 against so Sole Trader A has looked at ways of raising finance and cannot do it in time or in a conventional manner.
Sole Trader B pops along and offers to help. Sole Trader B is a relative (hence the motivation), is not VAT registered and is asset rich but cash poor.
Plan A ... Sole Trader B has offered to put in place a personal guarantee against the current and future tax debts if the TTP agreement can be reinstated for the 31 weeks. This would be covered by house and pensions, which easily cover the current and any potential future debt by a very large multiple.
Plan B ... Really do not like this ... Sole Trader A and B form a partnership and basically buy time as the taxes are now in a partnership and not a sole trader name, former Sole Trader B will have to charge VAT (B2B so no problem) and former Sole trader will raise finance against assets in a 3-month window and so any TPP arrangement would be 3 months and not 31 weeks.
Now the questions: Plan A is a personal guarantee likely get the TTP arrangement back in place; Plan B is this just stupid and does it even stand a chance of working?
Plan C has just popped into my head ... Personal Guarantee in place while B raises the cash.
Any opinions welcome good or bad I am clutching at straws today before I have to make phone calls.