Ltd Co, Partnership, Self Employed and 4 Years No Accounts

Hia Jen

First of all don't worry. I was unable to submit my vat returns for a 12 month period. After talking to HMRC they sent me duplicates and I submitted them.

Becuase I was not trading at this time I entered a zero ballance. They was happy. They was happy to help me. They are not like the old tax office, they want to help even if you are in trouble.

HI

Sorry to hear that. It is not nice having a business you have spent time and effort into running closing down.

We spent 2 years planning a business, signed a lease, then 2 weeks later it was announced that it was the start of a recession, we had no choice but to run the business as we would have to have paid 6 months rent anyway. Luckily we were not in your bad position, we kept a close eye on our finances because part of our business was bookkeeping firm which has been in existence since August 2006. In hindsight we made a mistake deciding to take a gamble and open an internet/gaming cafe and an IT franchise, we opened Christmas 2008 and the internet gaming cafe and IT franchise were not doing as well as we hoped but luckily the bookkeeping side and decided to sell collectable books online were doing well which covered the costs of the retail premises but were working long hours for nothing as just breaking even. A shoplifter was the last straw and we gave notice in September 09 to close, we closed in November but had to pay rent until today, it was quite sad having to give the keys back today but a relieve that we don't have to pay any more rent.

As for your predicament with Inland Revenue contact them and explain your circumstances. If you have to do the tax returns and can't afford an accountant Inland Revenue run free courses which gives you some basic information, and if you look online on ebay/amazon secondhand you may find text books that explain things relating to tax as well or bit more pricey Waterstones or WHS have a good selection of these, I bought a couple because have to do our own Limited Company Accounts and Corporation Tax form because cannot justify the cost of an accountant.

Good luck

Alison

Hi Jen

Thanks for the reply.

My husband who is the other director says that at least we tried running it, he had wanted to run an internet/gaming cafe for many years before hand and never did and he says if we had not taken the gamble he would still be dreaming about running one, in the end it turned out like a pub, people so eager to run a pub and when it actually happens and they have to work hard to run it the enjoyment factor goes away.

The good thing to come out of it, is that many of our friends and family thought our relationship would not survive running a business together (sometimes hubby and I can argue about nothing as we both very stubborn) but we have prooved them all wrong and if anything our relationship is stronger then ever, some of the friends who thought we would not last running a business and relationship said that they could not have run a business with their partner and deal with all the problems we did, we had one problem after another and have their relationship survive.

Thanks

Alison

jenjenjo123 said:

Since around Oct last year we started doing the business properly again, although we are on Housing Benefit and Working Tax Credits.

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You need to contact them asap. A new self employment should be notified within 90 days so you are already into a £100 fine.

Your previous history will not be an issue as your 2010 Self Assessment will only include things you have done since 6th April 2009. You said you are on benefits so no problem.

It is unlikely they will let you off the £100 despite your circumstances but further delay will cost you more.

Don't think you can't afford a professional accountant. We don't bite, we all save more than we cost and you can set up a monthly payment plan with most to ease the burden.

A quick phonecall to one when you restarted last October will have saved you £100 for a start.

Hi

I just wanted to say that I feel your frustrations - people always assume that if you have your own business, you must be making a packet every single month and could retire next year. You and I, like everyone else on this forum know that it ain't that simple and that the truth is very much less glamorous.

I must echo what Investors-Wanted said, if you are struggling and not earning much they won't bite you - in fact I have found them to be VERY fair - it's the people earning the bigger incomes and not paying taxes that is more of a concern.

As for your accountant, well, it is very easy for an outsider to say "just tell them the truth", but you and I know that admitting failure (especially in business) is rather hard to swallow and can feel embarressing and leaves little for you to motivate yourself.

I think we can all learn a thing or two and I suspect your story is one that can be shared with many on this forum.

Hi, and sorry to hear that you have had a few problems over the years.

The Revenue are helpful and are more interested in getting their files up to date than anything else!

First, do not worry about an accountant not touching you, I take on any number of people who have hid their heads in the sand and in every case, they are pleased to have got the ball rolling. They fall into 2 distinct groups and there is a major difference between them. One is to say they need help and various factors have combined and conspired to stop them and the others come in, say they must have everything sorted out and don't care what it costs. I truly hope you are the former!

The Limited Company does not enter into the picture as it no longer exists so do not even consider that - nobody wants any figures.

The bankruptcy in December 2007 also (apologies for the choice of words) helps! You do not pay tax in the year of bankruptcy so that's 2007/08 out of the way. They normally ask for tax returns so you can estimate your figures and put them in. Tell them they are estimated and they WILL accept them (as long as you are being reasonable). It makes no difference how much tax is due, you will not pay it.

You will have to put some figures together for the period Dec 07 onwards. I would recommend Year ended 31st Dec 08 which need to be declared on the 2009 tax return. The penalties are complicated but if the profits are low, you may get away with nothing to pay! There are several penalties:
1. National Insurance Contributions Office. You get 3 months from the end of the month in which you commence to tell them. A £100 fine if you are late unless the profit is expected to be less than about £5,000 when you can claim exception. Thus no NI due and no fine. (also worth mentioning, if you were self employed before and did not cancel the direct debit then they have had your money and no offence).
2. Inland Revenue. Their time limit is 6 months from the end of the tax year in which you start which takes you to 5th October 2009. £100 fine for late notification unless the profit is less than the personal allowance.
3. Inland Revenue tax return penalty. The only tax return which is late is 2009 (due 31.01.10) If there is no tax to pay then no penalty.

When you are bankrupted, your tax reference number is changed. Thus you may have had the letter from Inland Revenue telling you that you do not need to do a tax return because that then closes the old reference. You will find that you have a new reference so make sure you only make payments under your new reference!

Phone them tomorrow, they will be really helpful. Even better, have a chat with an accountant and they will sort it all out. The only work to be done is a set of accounts to Dec 08, the rest is guesswork and form filling.

Contact me if you need anything and good luck.