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trading from personal account instead of company

Whilst the company is struck off by Companies House due to non filing of the confirmation statement

Client has been trading from her personal account whilst unaware of the fact that her company was shut down in 2017 due to non filing of confirmation statement! What is the tax position? She has been getting paid in her personal current account.

Sole trader or limited company?

There's a big  tax bill for 2018-19 if declared as personal income due to paye job.

Can she use an existing company to show trading? Not sure how it will work. Even if it is possible. 

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21st Feb 2019 06:39

Sole trader and big tax bill.

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21st Feb 2019 07:08

Has she still be using the co name on paperwork?

Do an administrative restoration, which is relatively easy. And make her own a co bank account and use that!

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to atleastisoundknowledgable...
21st Feb 2019 08:20

But does that actually affect / address the issue?

'Companies Act 2006' wrote:
1028 Effect of administrative restoration
(1)The general effect of administrative restoration to the register is that the company is deemed to have continued in existence as if it had not been dissolved or struck off the register.

You see this says the effect 'to the register'.....
It doesn't say that the effect 'to the rest of the world' is that the company is deemed to have continued and, whilst dissolved, is deemed to have entered into transactions.

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to Wanderer
21st Feb 2019 08:25

Temporarily ignore the banking issue - what does the paperwork (mainly sales invoices) say?

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to atleastisoundknowledgable...
21st Feb 2019 08:30

If we assume that the sales invoices are made out in the (dissolved) company name.
Same question.

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to Wanderer
21st Feb 2019 08:46

Then her customers think she’s trading as the ltd, she think she’s trading as a ltd - administrative restoration will formalise it.

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to atleastisoundknowledgable...
21st Feb 2019 08:54

Source / authority?
(Genuine interest.)

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to Wanderer
21st Feb 2019 09:06

Quote:

Source / authority?
(Genuine interest.)

Sorry, I don’t quite understand ...

She & her customers think she’s trading as a Ltd. She’s only technically not as the company has been dissolved. (I’m assuming that the filing history does show trade in the past, but it’s not the end of the world if not).

The ltd was dissolved not for not trading, but for not submitting docs at CoHse. Do an admin restoration, which will involve submitting said docs, and all’s well. Late filing fees for CoHse and HMRC (and CT interest).

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to atleastisoundknowledgable...
21st Feb 2019 09:14

I agree, it is restored from the original date it was dissolved.

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to atleastisoundknowledgable...
21st Feb 2019 09:20

I understand what you say and what your conclusion is however I'm asking if there's any law or authority for reaching the conclusion that the effect is that the company was still trading. I agree with all that is said in this post but my question still stands.

The Companies Act specifically uses the words 'to the register'. If the general effect under S1028 is that the company was still able to trade and the transactions it entered into whilst dissolved are in same way validated then the words 'to the register' in S1028 are superfluous.

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to Wanderer
21st Feb 2019 09:40

I think you're confusing yourself by splitting phrases at the wrong place. You need to read "restoration to the register" as a complete phrase.

In other words, 'effect of "restoration to the register"' and not, as you seem to be interpreting it, 'effect of restoration "to the register"'.

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to Wilson Philips
21st Feb 2019 09:46

Perfect! Just what I was getting at. I now agree with the conclusions reached!

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to Wilson Philips
21st Feb 2019 09:50

That's exactly what I was about to say! That part of the chapter is headed 'Administrative restoration to the register'.

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21st Feb 2019 09:41

She can't be trading from a limited company that doesn't exist.

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to andy.partridge
21st Feb 2019 09:49

Quite.

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to andy.partridge
21st Feb 2019 09:54

Quote:

She can't be trading from a limited company that doesn't exist.

She can if the dissolution is in effect rescinded - there's a subtle difference between 'doesn't exist' and 'dissolved'.

See (nearly) every other post on this thread.

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to atleastisoundknowledgable...
21st Feb 2019 11:20

This is compatible with what I said. It will require action, time and expense which hitherto has not been on the OP's agenda.

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21st Feb 2019 09:43

Company restoration. This will tell you all about it. I suggest you get a solicitor to do it
https://www.gov.uk/guidance/company-restoration-guide

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21st Feb 2019 09:46

The last sentence of the 1st para tells you want you what is the effect of restoration is:-
9. What happens when the order has been made
An office copy of the order, with an original court seal (stamp), must be delivered to the Registrar by the Claimant. It is recommended that the order be sent by recorded delivery or delivered by hand, see section 6 above. A company is regarded as being restored when the order is delivered to the Registrar. The company is then regarded as having continued in existence as if it had not been struck off and dissolved.

If an Order is made without the consent of the Registrar of Companies or is in a form that he is unable to accept, he may instruct the Government Legal Department to apply to set it aside, or agree that an Order be made in its place which he is able to accept.

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to bernard michael
21st Feb 2019 09:51

So a big legal bill now replaces her big tax bill.

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to lionofludesch
21st Feb 2019 10:07

Define big, especially in relation to the tax bill in the OP.

For the CoSec part of the last admin restoration that I did, I charged £250 + disbursements, plus normal (well, ever-so-slightly higher due to time pressure) fees for doing the CS01s and accounts to bring filing requirements up-to-date.

So £250 + £150-ish isn't a massive amount to regain the company that you didn't realise you'd lost.

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to atleastisoundknowledgable...
21st Feb 2019 10:17

Follow the money.

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to lionofludesch
21st Feb 2019 10:15

Don't forget the P11D BIK and s455 deposit.

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