Advice needed

50shades

Free Member
May 5, 2016
6
0
Up until a few months ago my world seemed to be wine and roses.
My wife and I ran a consultancy, first with my own ltd company before joining her at her company as a director in September 2015, she did accounts, returns, VAT etc. (including my own) and I was a commercial advisor in the construction industry.
So in short she ran the accounts side of the business whilst I worked in the city.
Unfortunately this came to a shuddering halt about 7 weeks ago when she dies of an undiagnosed heart condition at the age of 48.
After a grieving period I decided to take the bull by the horns and seek advice of an accountant to look at the books (up until this point I have never looked at our accounts). It seems however that she has been taking unauthorised director's loans from the account ( she would have probably paid this back at year end with the 20 or so a year ends she filed) and on his advice it is unlikely that we would be able to meet out obligation to HMRC and the VAT,currently in the region of £20K by the end of the next tax year.

I have never received a payment remittance as she always did my books and returns and I was just given a company debit/credit card and told to put everything on it and she would sort it out, so I have also never even had my own bank account (now remedied a week ago).

Just to keep afloat I have been putting money from me liquidating some shares into the business account to pay for things like the funeral and living expenses as I had no bank account of my own.

I have been advised by my new accountant to throw myself on the mercy of HMRC to make the business insolvent but I am worried the recent activity will look suspicious. There is 3k of my money in the account ( what do I do with this ?), I cannot afford to be made bankrupt.

This is a massive mess, I know I should have taken more interest in the accounts, but along with mourning her death I am close to breaking point.
 

Scalloway

Free Member
Jun 6, 2010
18,430
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Shetland Islands
The first thing to do is to go through the posts in this thread.

http://www.ukbusinessforums.co.uk/t...ich-to-pay-an-insolvency-practitioner.316523/

As I see it you should get the accountant to draw up accounts to date and do a business plan to see if it is possible for the company to trade out of this situation. You need to identify someone who can take on the bookkeeping role going forward.

If this is not possible cease trading through the company if you have not already done so and send out the letter in the thread to all your company creditors. 3 months after ceasing trading you can apply to have the company struck off. HMRC may object but unless they take further action Companies House will eventually strike the company off.
 
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50shades

Free Member
May 5, 2016
6
0
I have had a consultation with an accountant he has advised me to stop trading and set up another company to continue earning a living, with a simple accounting system and fixed rate VAT which he will administer. In his eyes the other company is in a massive financial mess, owing to the £20k directors loan my wife has taken out and her estates inability to pay ( she left virtually no monies).So I have drafted the SB letters to HMRC and will effectively end the company on Friday but as per my previous post what do I do with the monies in the bank (some of which is someone paying my wages from a couple of weeks ago some the remainder of some shares that I sold to fund her funeral?
 
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Lisa Thomas

Business Member
Business Listing
Apr 20, 2015
5,476
1
1,450
www.parkerandrews.co.uk
Hi

I am sorry to hear of your loss.

If HMRC do not agree to the dissolution for whatever reason you could use the funds to liquidate the Company through the Court. The £3k should cover that.

Failing which the funds should be paid pro rata to all company creditors. If HMRC are the sole creditor the funds should be paid over to them.

My understanding is the dissolution notice needs to confirm that the Company cannot afford to Liquidate and has no assets, which is not strictly true as the Company still has c£3k of cash.

Best of luck.
 
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Lisa Thomas

Business Member
Business Listing
Apr 20, 2015
5,476
1
1,450
www.parkerandrews.co.uk
Any Liquidator appointed may view that as a loan to the Company. Your payment of it back to yourself would then be an illegal preference as you could be paying yourself back over and above HMRC.

It's a small sum and if the Company is actually dissolved then it is highly unlikely to come to light.
 
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Lisa Thomas

Business Member
Business Listing
Apr 20, 2015
5,476
1
1,450
www.parkerandrews.co.uk
I can't recommend it.

All I can say is that if the money is taken out you might like to put it aside unless and until a Liquidator is appointed or the Company is formally dissolved.
 
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Overmyhead

Free Member
May 20, 2015
29
2
Firstly sincere condolences to you - a truly awful situation.

I'm far from an expert but given the relatively small sums involved I would be inclined to put the funds to one side and keep them safe until the dissolution. I also think your accountants suggestion re a newco seems eminently sensible and perhaps look at some training/courses re financials/accounting. You don't necessarily need to be an accountant but a healthy grasp of the numbers will be invaluable moving forwards.
Best of luck and I hope all works out for the best.
 
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50shades

Free Member
May 5, 2016
6
0
I have signed up to a well known contractor software package and agreed to use a flat rate of VAT so that should keep me on track as far as the new company goes.
I am Commercial Manager for the construction industry so I am pretty good with figures I just have no idea about situations like these, but I am being made to learn fast.
 
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