company wound up by hmrc

villapb

A member of my family owes the hmrc corp tax and some vat and cant pay, hasn,t traded for nearly a year and finally hmrc chasing him. He is ignoring the hmrc legal people as he has walked away, in financial trouble to be honest. My question because they have asked me, should they speak to the legals who are chasing, believe it is fairfax.
Thanks in advance.

stefanboro

Need a bit more info on this one. Firstly, it is never advisable to bury your head in the sand and if there is a lack of clarity of where the guy stands seek legal advice.

If traded through a company, as you have indicated, make sure this person has not operated against the provisons of sections 213 and 214 of the insolvency act 1986 for wrongful or fraudulent trading.

villapb

Hi stefan thanks for your reply.
He was limited but all his trade was from one company and the work dried up. He was profitable hence ct and vat but has no trade or income now to pay hmrc, the money was spent trying to keep afloat. He hasnt any other creditors so i think didnt beach the insolvency act, ie when he knew the comapny was insolvent , he stopped trading. HMRC are the only creditor so i think he should speak to them as he is ltd and say "cant pay and not wont pay, just havent got the funds sorry".

stefanboro

villapb wrote: »

Hi stefan thanks for your reply.
He was limited but all his trade was from one company and the work dried up. He was profitable hence ct and vat but has no trade or income now to pay hmrc, the money was spent trying to keep afloat. He hasnt any other creditors so i think didnt beach the insolvency act, ie when he knew the comapny was insolvent , he stopped trading. HMRC are the only creditor so i think he should speak to them as he is ltd and say "cant pay and not wont pay, just havent got the funds sorry".

Agreed so long as you have his remuneration tied up properly - i.e. no illegal dividends.

Here is a related topic you may find helpful:

http://www.accountingweb.co.uk/anyanswers/hmrc-linking-ct-liability-directors-pay-dividends/488271

villapb

many thanks stefan, the link confirmed what i thought, the ct is 8k so i know now what to tell him, cheers peter, ps the ltd company has no assets either so hmrc wasting thier time and he took no divis just min wage .....a good guy really, a shame tbh.