We had a client 3 years ago who did no work with us, appeared to have not traded at all, provided us with no information and then disapeared. His company was eventually struck off. He has just called back and asked us to open a new company but said on the phone 'I had better not use the same company name, I might end up having to pay Corporation Tax'. This could be simply a case of him mis-understanding, but could equally have been him closing companies without completing any returns....tax evasion and hence falls under the Money Laundering Regulations?
My initial response was going to be to advise him strongly that if any tax was outstanding from his previous company that we address this now (with payment up front) and if he declines to do so/evades the issue then decline to act for him. I am just not sure if this is a robust enough response or if it is 'Suspicious Activity Report' time....
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"We had a client 3 years ago who did no work with us, appeared to have not traded at all, provided us with no information and then disapeared. His company was eventually struck off."
Why are you bothering with this person? Are you 'that' desperate and does the ex-client think you are 'that' soft? That's what really bothers me about this.
If the Company has been struck off there are no taxes due, the shareholder/director has got away with it. He couldn't use a new company with the same name anyway, he would have to resurrect the old one.
I wouldn't want to act for him though, if he didn't engage last time, what makes you think he will this time.
He could use the same name of old company for new one which is part of the madness of our system. Form a company run for a year don't pay any taxes and then let Companies House strike off and hey presto start again with same name three months later.
I think the crux of the matter is whether you consider what he said to you to be enough reason to suspect suspicious activity on his part.
Personally, when he came back after the three year absence I would have quizzed him on what happened with the first company. If he told me that he never traded and I believed him I'd have no reason for the SAR, if he told me he wound it up to dodge tax, well, I'd probably not re-engage and I doubt his personal friend would take issue with the decision.
Did you not ask him anything about it? Even after the comment re: Corporation Tax?
If in doubt issue a SAR. You have no idea what he has been up to and comments like "I had better not use the same company name" are never made without their being a reson.
If the previous company had not traded there would have been to CT.
I would also not act for him again.