northeast
19th September 2008, 12:21
Hi
I am looking for advice for my sister who runs a limited company which has serious cashflow problems.
The company has been owed £6000 since March of this year (terms 30 days) by a customer. Around 10 weeks ago, after many telephone conversations in which they promised to pay up, they faxed my sister claiming they had wrongly overpaid HMRC and would need another six weeks until that was sorted before making payment.
After the six weeks was up, they claimed HMRC would not give a refund but would deduct it from their next bill.
They said they didn't know when they might be able to pay so I suggested she threaten them that she would petition for bankruptcy. After being unable to speak to anyone in days, this resulted in them calling her back and asking if they could pay by weekly instalments. She agreed.
The first payment was due last week but needless to say, it didn't arrive. This week they claimed it was an oversight and they will send a double payment by today - it hasn't yet arrived.
I assume they have their own cashflow problems and my sister is way down their list of priorities. However, she owes this money to HMRC and I've told her she needs to sort this out. Why should she be so stressed about inability to pay HMRC when this customer owes her that amount!!
Apparently, they were subcontracting the work from one of their own clients and I suggested she contact the firm which originally commissioned the work to report that their sub contractor is not paying up.
I now think she either needs to take county court action (not just threaten it) or take some steps to suggest she is seeking bankruptcy order on them. If they are able to raise the money, this should make them pay up.
I also think that she needs to tell them the instalment option has now been withdrawn because they did not make the payment when promised.
Is £6k covered by county court or is the amount too high? would she be better proceedings with the bankruptcy threat? What she doesn't want is to have to send in bailiffs to take goods that she'd then have to try to sell before she can settle her outstanding HMRC account.
Any suggestions/advice would be much appreciated.
with thanks
I am looking for advice for my sister who runs a limited company which has serious cashflow problems.
The company has been owed £6000 since March of this year (terms 30 days) by a customer. Around 10 weeks ago, after many telephone conversations in which they promised to pay up, they faxed my sister claiming they had wrongly overpaid HMRC and would need another six weeks until that was sorted before making payment.
After the six weeks was up, they claimed HMRC would not give a refund but would deduct it from their next bill.
They said they didn't know when they might be able to pay so I suggested she threaten them that she would petition for bankruptcy. After being unable to speak to anyone in days, this resulted in them calling her back and asking if they could pay by weekly instalments. She agreed.
The first payment was due last week but needless to say, it didn't arrive. This week they claimed it was an oversight and they will send a double payment by today - it hasn't yet arrived.
I assume they have their own cashflow problems and my sister is way down their list of priorities. However, she owes this money to HMRC and I've told her she needs to sort this out. Why should she be so stressed about inability to pay HMRC when this customer owes her that amount!!
Apparently, they were subcontracting the work from one of their own clients and I suggested she contact the firm which originally commissioned the work to report that their sub contractor is not paying up.
I now think she either needs to take county court action (not just threaten it) or take some steps to suggest she is seeking bankruptcy order on them. If they are able to raise the money, this should make them pay up.
I also think that she needs to tell them the instalment option has now been withdrawn because they did not make the payment when promised.
Is £6k covered by county court or is the amount too high? would she be better proceedings with the bankruptcy threat? What she doesn't want is to have to send in bailiffs to take goods that she'd then have to try to sell before she can settle her outstanding HMRC account.
Any suggestions/advice would be much appreciated.
with thanks