Advice please - following Spongebobplan

Discussion in 'Insolvency' started by SH2503, Feb 8, 2018.

  1. SH2503

    SH2503 UKBF Newcomer Free Member

    1 0
    Hi
    My husbands small ltd business started to struggle a couple of years ago and we plodded on hoping it would pick up for far too long. Cash flow became a huge problem last year and we decided end of Nov that we had no other option but to cease trade. With no assets or money to spare we have followed the spongebob plan. * I should just add that no wage or dividends have been taken out of the business for a long time. My husband got paid £3k in wages last year but we had to stop paying him a wage due to cash flow July last year approx. No dividends taken and no director loans. *
    So we’ve followed the sponge bob plan - sent letters out following ceasing trade end of Nov. We owe corporation tax and vat approx £12k and creditors the largest one being £5k ... total £15k approx. We also have a business overdraft £20k and funding circle loan £40k both of which are guarantorred by us personally. Our house sale is going through to cover the loan and overdraft.
    End of Feb will be 3 months so we could apply to close but I’m aware hmrc will object. Although hmrc seem to have forgotten about us! We set up a payment plan with them last year but they have never put the direct debit in place or chased us as yet.
    My questions if anyone can advise are:
    One supplier has sent a court claim in for £1400 we owe. They had a spongebob letter in Nov but have gone to the small claim court now. Will this stop us closing the business?
    Also there is a Barclaycard commercial credit card with £5k balance - do you think we’d be personally liable for this?
    Our end of year is March 31st should we wait and get year end accounts done or just try to close?
    Our house sale should complete 6-8 weeks from now.
    Thanks in advance
     
    Posted: Feb 8, 2018 By: SH2503 Member since: Jan 12, 2018
    #1
  2. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

    4,195 715
    You have £90K approx of debt with no assets?

    Unless you have been trading at a loss for a number of years I can not quite see why there is not an overdrawn Director Loan Account.

    In answer to you question get the company dissolved and don't worry about preparing outstanding accounts & returns.
     
    Last edited: Feb 8, 2018
    Posted: Feb 8, 2018 By: UK Contractor Accountant Member since: Sep 18, 2013
    #2
  3. Spongebob

    Spongebob UKBF Ace Free Member

    2,108 1,069
    Did you both guarantee the overdraft and loan, or was it just your husband? If it was both of you, did you seek independent legal advice before signing the guarantee?

    Are you also a director of the company?

    How much equity is in the house?
     
    Posted: Feb 9, 2018 By: Spongebob Member since: Dec 9, 2008
    #3