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Unusual increase in number of objections by HMRC

against company closures?

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Hi. I have recently noticed an increase in the number of objections raised by HMRC (and by others?) against compulsory strike off action by Companies House. In those cases the directors took no action to file confirmation stnt or accounts (dormant companies). In some cases the objections are justified but in others they are not (in one case HMRC staff told me they didnt know the reason for the objection!). The problem is if you advise a client to do nothing, they may end up with substantial penalties for late filing (both from HMRC and Conpanies House). Has anyone else experienced this and what do you think? Thanks.

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By bluebaron
23rd Sep 2021 11:11

I applied to dissolve a client company in January 2020, and despite everything actually having been filed and up-to-date, taxes paid, someone (I imagine it was HMRC) kept objecting, and it took a whole year to January 2021 till the company was finally dissolved. It was very annoying for both myself and the client.

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Replying to bluebaron:
RedFive
By RedFive
23rd Sep 2021 12:32

Did you do anything to get it dissolved or did it just happen of its own accord eventually?

I've got one from January 2021, objection in February and just sitting there stalled. No taxes due, no debts but someone has objected and DIrector can't find out who. Confrmation statement and accounts overdue now.

In the past about 2 months after suspension the process started again and dissolution happened within the next month but that seems to have stopped. Covid?

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Replying to RedFive:
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By bluebaron
23rd Sep 2021 12:38

Yes, I sent in the form DS01. Two or three times persons unknown objected to the dissolution. Yours seems a similar situation to mine.

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Replying to RedFive:
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By Paul Crowley
23rd Sep 2021 12:39

Agreed that in the past Co House expected objectors to be active and take the company to court to prove the debt.
Evidence of the liability not good enough and Co house restarted the process
I suspect covid caused a change in the pattern

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By Paul Crowley
23rd Sep 2021 11:16

Banks are objecting quicker than in the past
They will object even if listed due to late filing of accounts

I suspect HMRC are objecting by automatic notification from Co house, No Human involved.

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By cbp99
23rd Sep 2021 11:29

Do these cases involve a) monies owed to HMRC eg CT, Paye, Vat; and b) both Co House initiated strike off, and DS01 cases?

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Stepurhan
By stepurhan
23rd Sep 2021 12:14

Re late filing penalties.

Companies House only arise when you file. If there is actually no need to file (genunine strike off) then you won't get late filing penalties from them.

Late filing penalties for HMRC are only applicable if a return needed to be filed. If you can get the return withdrawn due to no reportable activity, no penalties.

As for objections, I have tried to pre-empt HMRC in the past by writing to them informing them nothing is due so there is no reason to object. With their current processing times, you probably need to send that letter a year before strike-off now.

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By rmillaree
23rd Sep 2021 12:38

i suspect its a case of rightly so , i am presuming generally speaking the hmrc records will either indicate there is tax o/s or the company is still live trading (when its not) - or that there is a return that needs filing that has not been filed. I have great smpathy here that many companyu directors to not ensure hmrc have full adequate notes on file !

I would be surprised hmrc are objecting where a companies records indicate all tax paid and there is nothing to submit.

I am slightly old school in that i think its courteous to ensure this paperwork should be properly aligned on hmrc systems - albeit if hmrc have ben told more than once and choose not to update then at least they have ben told.

As to what happens when all lose ends have been tied up - thats between director and hmrc but i suitably warn directors they should expect hmrc intervention if all loose ends are not tied up Or there is tax o/s. I would always recommend they actively appraise hmrc along the lines hmrc themselves like.

They used to say at minimum get director to do letter along line of no profits no corp tax (opr no funds to pay copr tax) no assets and no funds to pay accountancy if that matches the reality of the situation - ideally best never to get dragged into that one though !!

If its matter of fcat there are no funds left and there are bills os and hmrc have been fully advised then i really dont see what the problem is with penalties being lumped on top - notying to stop directors appealing penalties on basis they have told hmrc the score - as long as ceased trading flag is on the system these should be limited anyway.

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By zebaa
23rd Sep 2021 16:57

Just tell the client to resign as director. Co house will then write threatening to strike the company UNLESS a new director is appointed. Don't. Job done.

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Lisa Thomas
By Insolvency Practitioner
24th Sep 2021 12:26

HMRC will automatically object if there are outstanding returns, or taxes.

The Banks are objecting due to the BBLs.

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Replying to Insolvency Practitioner:
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By cbp99
28th Sep 2021 10:45

It's not our experience that HMRC will automatically object. I have seen a number of cases of strike off going through with HMRC as a creditor.

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neand
By neanderthal
28th Sep 2021 09:51

Hi. I was wondering, if accounts to Companies Hose are late (and hence penalties lurking if filing done), and HMRC have already objected, would it be acceptable to send accounts to HMRC but not to Companies House (to overcome the objection without incurring penalties from Companies House)?

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Replying to neanderthal:
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By rmillaree
28th Sep 2021 19:08

"would it be acceptable to send accounts to HMRC but not to Companies House (to overcome the objection without incurring penalties from Companies House)?"

Companies house are on your side here they explicitly state you don't need to file last acounts with companies house.

https://www.gov.uk/strike-off-your-company-from-companies-register/close...

Final accounts
You must send final statutory accounts and a Company Tax Return to HMRC.
You don’t have to file final accounts with Companies House.

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