Your client's only possible "bad debt" would be his DLA, and you can't carry that across. Surely he wasn't trading with the Company?
And thrice nay!
As an accountant you should know this. It is a pretty basic feature of the company being a separate legal entity from the individuals owning/running it.
Exactly - it's why he's running a profitable Company now rather than hauling himself out of bankruptcy, so he should be counting his blessings.
From their side, client was incorrectly down as flat-rate, now they aren't, so error corrected.
I'm not saying they are right, and I'd argue with them 'til the cows came home if it was my client, but I don't think taking it further is guaranteed to be a success.
If you look at it from HMRC's side, you've asked them to assist in correcting your error, which they've done, even though they didn't have to. This correction had an unforeseen consequence, which you've asked them to reverse. Bearing in mind the rationale behind Flat Rate VAT (simplicity, not profit to the taxpayer) and the fact that you do want to be in FR from Q2 but not in Q1, I'd not be so sure that the FTT would go along with your request. The fact that your client is potentially out of pocket is between you and your client to resolve, HMRC wouldn't be interested (except maybe to query your choice of flat rate %, given the expected benefit!).
Yes but yes!
What I said, except that instead of paying cash for the goodwill, the outgoing Director would offset some, most or all against DLA (all in your scenario, assuming even split of the £300k).
The remaining Dirs would still need to buy the shares.
Two separate issues here..
The share value will be based upon GRF, about £100k sounds right as per OP's clarifying message. No reason to assume this wouldn't be achievable on open market, surely? Remaining shareholders would pay this from personal funds.
If he then bought the clients from the Company this would be a similar sum, but payable to the Company.
Some clients may want to stay with the firm not the outgoing Director, I'd have thought...
Repayments to card
Apparently it's because of "banking rules" that repayments are made to the card from which they were paid. Bit like shop purchases, which is clearly what the rules were devised for.
Other potential problems to be anticipated will include - payments made by other family members/friends/divorced spouses etc etc.
It only happens where a payment was made by card in the (7 - I think) months before the repayment.
Not so sure about that Tim, although I agree with the broad sentiment. As a couple they decided to have kids and for her to be a stay at home parent to their kids, they bought a few properties, he flits off abroad and leaves her with his debts and the properties, none of which could be sold for an amount to cover the mortgages (partly due to his actions and unknown to her - fraudulent, basically), so she has young children, negative assets and no real job prospects. Bit tricky to know what to do imho.
Bearing in mind that I've had enquiries started because box 6 turnover does not match the accounts, can it really be treated with total disregard? The last one was a while ago - usually explained by debtors or similar.
re Higher Gross
Thanks norstar - this will hit one client hard, she has properties from a divorce settlement which give a low income because of large borrowings, currently gets decent sum in tax credits; ex-husband abroad, non-UK national, no chance of reviewing settlement (apparently no assets anyway).