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VAT Registration

Bankruptcy & Security Deposit/Bond

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Long time member, sometimes contributor, but first question so please be gentle!

My sole trader client was made bankrupt in March 2018 (now discharged) and amongst others, had a VAT debt of approx £12k.

He re-started his sole trader business and is now in a position where he may be required to register for VAT around Feb 2020.

He/we are also exploring the possibility of incorporation.

Does anyone here have any experience of whether HMRC would regard his bankruptcy to be relevant?

And also whether they would demand a security deposit/bond against his registration?

I am loathe to phone HMRC as we all know that their advice can be wrong.

Thanks in advance

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By lionofludesch
15th Nov 2019 11:23


All you can do is hope they don't notice. If they do, it's a cashflow thing but not a cost.

You should be able to get an end date put on it.

It's hard to argue against because, actually, it's quite a reasonable condition.

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