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Using strike off for tax planning
The extent to which companies that owe tax are being struck off with no official enquiry at all is worrying. If I was unscrupulous I would be advising clients to trade as a company for two years, charge customers VAT but not file any returns, not file any accounts or tax returns, then let Companies House strike off the company and start again.
I can't see any problems for people doing this. How are we supposed to persuade people to do the right thing? I told my MP this was happening, and the reply he got back from the treasury was that I should report any companies where I suspect this has happened.....and what about the others?
There doesn't appear
to be any consistency. We have companies shut down owing large tax bills and HMRC objecting over a couple of hundred (mind you it was a penalty). We have had a charity (ltd co) struck off yet the charities commision still wanted accounts as the charity was still going. All good stuff.
It's certainly true that Co House are striking off very early for annual returns (maybe the Crown needs the money in the bank accounts).
Using Strike Off For Tax Planning
Oldmanwetmix is right..I have known clients set up, trade and never once filed accounts or vat returns year after year, company after company. Personally liable..? you must be joking..HMRC have never once even attempted to do anything..and on what basis..these unscrupulous directors claim they were trading with an attempt to be profitable but it just didn't work..so..whoopee they now only have 2 months less for the company to be struck off..most of them will be saying thanks that's 2 months less time to get HMRC off my back if they ever bothered in the first place..!
I recently asked Companies House to not strike off a company that had the notice published in the Gazette and they informed me they wouldn't strike it off but they would commence criminal proceedings against the director(s).
HMRC OBJECT
In nearly all cases in the past year or so I have found that HMRC object to the striking off then do nothing to follow this up. Anyone had similar experience?
HMRC ARE ASLEEP
I have seen this happen where Directors draw all the money out and then allow the Company to be struck off. HMRC object but don't do anything else and eventually the Company is struck off. HMRC don't even trouble to have a go at the Directors on the grounds that they obviously owe the Company the money that they have withdrawn.
I suppose that it is too much trouble for too little return but this failure encourages everyone else to contemplate the same action.
I too have seen situations where HMRC just don't bother to pursue unpaid, unreturned VAT.
I saw one case where the VAT registration had been there for 10 years unchased and suddenly came to life. Fortunately the Company hadn't been trading but even so it suggests that HMRC is a little less than efficient.
CIS is another area where unpaid liabilities seem to go unnoticed for ages.
One can only assume that it is so easy to collect tax from the "hard working families" that it isn't worth chasing those who can't be bothered to pay.
It may not be practical to chase them all but a few high profile hits might encourage the others. The same would apply to all the little sole traders earning £12,000 a year and living in £500,000 houses. It doesn't take much effort to spot them with all the digital information to hand but HMRC are just too lazy to do it and prefer to do Google and the like for derisory amounts which look big when they hit the Press.
HMRC fit for purpose? Absolutely not and it's those of us who do pay who pay for those who don't which is really an insult to the real workers.
Yet another case of the smug Osborne thinking he's clever when really he has his eyes shut to reality.
Well said, redbuck
I have seen this happen where Directors draw all the money out and then allow the Company to be struck off. HMRC object but don't do anything else and eventually the Company is struck off. HMRC don't even trouble to have a go at the Directors on the grounds that they obviously owe the Company the money that they have withdrawn.
I suppose that it is too much trouble for too little return but this failure encourages everyone else to contemplate the same action.
I too have seen situations where HMRC just don't bother to pursue unpaid, unreturned VAT.
I saw one case where the VAT registration had been there for 10 years unchased and suddenly came to life. Fortunately the Company hadn't been trading but even so it suggests that HMRC is a little less than efficient.
CIS is another area where unpaid liabilities seem to go unnoticed for ages.
One can only assume that it is so easy to collect tax from the "hard working families" that it isn't worth chasing those who can't be bothered to pay.
It may not be practical to chase them all but a few high profile hits might encourage the others. The same would apply to all the little sole traders earning £12,000 a year and living in £500,000 houses. It doesn't take much effort to spot them with all the digital information to hand but HMRC are just too lazy to do it and prefer to do Google and the like for derisory amounts which look big when they hit the Press.
HMRC fit for purpose? Absolutely not and it's those of us who do pay who pay for those who don't which is really an insult to the real workers.
Yet another case of the smug Osborne thinking he's clever when really he has his eyes shut to reality.
Meantime, we have "the smug Mr Sweetman" popping up on these pages every so often with his little pokes at people like the Barclay Brothers or non-doms, but curiously ignores such dodges as in the scenarios quoted above - which arguably has more of a knock-on effect for the honest taxpayer and the economy in general - perhaps the fact he's ex-HMRC himself?