Another insolvency question

[Goingunder]

Hi I'll spare the background but I currently owe:

HMRC £5k VAT (last return late and not done)
£4.5 PAYE
£1.5k CT
£2k to one supplier
£2.5 to another
£800 LTD company credit card

I also am being chased for a parking fine in LTD company name for about £650 (bailiffs after it)

I have DCA after all HMRC debts and they have been put on hold for 30 days.

Also have DCA after one of the suppliers.

I have spoken to two IPs and both have offered to help for around £5k. One wants 50% one wants £500 and the remainder over 12 months.

The latter have said about redundancy pay and likely that will cover all her costs anyway.

I'm not sure whether to do that or do this Spongebob method.

I opened a new LTD company yesterday. I'm not sure if the name it too similar though.

Say my name is James White. My current company is James White Ltd but trades unofficially under another name.

My new name is Whites Autos Ltd.

I also haven't had a personal bank account so I started one last night.

I'm determined to put the poor business running behind me.

I also very much may let the Ltd company lay dormant and trade as self employed.

The company is just not going to come out of that debt as small as it may seem.

I can make a small and steady living under a new aspect of business. It won't buy me a Ferarri but it will support us.

Currently living with her parents but soon to rent a house.

She is employed currently by my ltd company but doesn't need to be.



Do I send the SB letter to all creditors or to the DCA or both?

What about the council in regards the parking fine?

What do I do? Stop trading now and trade under new Ltd company for a while?


One IP said to sell assets to Newco at a reasonable rate. Apparently on my books my assets are £38.

In terms of the LTd company the assets are very very few. £500 on a very very good day in tools as I hadn't realised m SnapOn is all in my personal name.

Which leads me to another question.

I've claimed the VAT back on tools that subsequently the invoices say that I personally own.

Do I take them as owned by oldCO or have I done something claiming VAT back?

If I do sell from old co to new co can I stick the cash in an envelope and keep it or do I need to put it in bank?

Thanks guys

 

[UK Contractor Accountant]

Have the IP's mentioned anything about repaying your overdrawn Director Loan Account?

The assumption being that the company is unable to pay its debts as the Director/Shareholder has taken the money out of the company as illegal dividends or did the company actually make trading losses?

 

[Goingunder]

This is the thing.

I don't know 100% I've been knocked several times.

I've got one bank account and have personally put cash/borrowed from a good friend to pay the employee.

One mentioned DLA and said the good news is you don't have one.

I've sold a couple of personal vehicles and put the money in the company account.

 

[UK Contractor Accountant]

Ah - you have an employee?

They might be entitled to Redundancy Pay in which case the IP route is probably the best way to go.

The assets (inc Snap on Tools) need to be valued and sold to new company - the value in the accounts is irrelevant. You use ebay values etc.

 

[Goingunder]

Only my wife which was for (unsuccessful) mortgage reasons.

5 months so the IP said won't be any redundancy.

Ok even though they are reciepted in my name?

 

[UK Contractor Accountant]

Ok even though they are receipted in my name?

if the company paid for them and claimed vat then yes.

They have probably been included as tools & plant in the company accounts anyway.

 

[Lisa Thomas]

You may have introduced the assets to the Company via a Director Loan Account. Best to check with the accountants as to ownership. as these may now belong to the Company.

 

[Goingunder]

To be honest looking at the paperwork the SnapOn man has put it in the wrong name by mistake.

I use an alias (not registered trading name) and hes used that as in J W Vehicle Services Ltd where as it should be James White Ltd.

So i assume it would be under the ltd company as thats where it should be.

What is a reasonable price for tools and assets?

Vans worth £500 and tools would make 500 job lot on ebay.

Woukd 600 be a reasonable amount as a job lot?

Do i need to phyisically put the money in the bank?

Thank you very much gyys

 

[Goingunder]

Hi guys.

A week and a bit on and thought things were looking up but I think the final nail has come.

I was really trying to stay afloat as my wife is planning on a mortgage application in 5 weeks and I need to keep her paid til it goes through but it looks like it might not happen.

A customer who owes us a chuck of money has themselves gone insolvent.

We do have one of their vehicles in lien but not sure if we can sell it or what.

Anyway one bit of advice. I've received a county claim form from Optima legal services for £750 for companies House fines.


What do I do? Pay it personally? Offer to pay X amount a month? Contest it? (Companies House took 4 months to give my accountant a code to get on with books. They say nothing received but my accountant has emails submitting and the automatic replies sent back).

Not sure what to do and if it affects anything?

 

[Gavin Bates]

Hi

Obviously I would say this but take advice from an IP on your duties if the company is insolvent. On the Ccj set up a payment plan.

Hope this helps.

Regards

Gavin

 

[Goingunder]

Thank you for your reply.

Would that not put us in a position of a CVA and therefore unable to strike off?

 

[Gavin Bates]

Sorry if you are planning to do a strike off then don’t bother with a payment plan

 

[Lisa Thomas]

I'm not sure a CVA would apply, but perhaps a CVL would. You need to take advice to explore the relevant options to the Company's circumstances.

As Gavin has suggested you really do need to take advice from an IP.

 

[Goingunder]

Hi guys.

Absolutely nothing good has happened and I seriously cannot find the money for an IP.

I need to get this put to bed now. The Mrs has gone back self employed (she was only PAYE for a mortgage but we have to put that on hold for now). So I have no employees to worry about.

Obviously the returns are due end of the month.

If I completely ignore the lot of it they usually threaten to strike the company off. What happens if I just ignore it all and let that happen? Do HMRC still object?

If that is not the best way do I just send that Spongebob letter to HMRC VAT and PAYE departments and all other creditors?

Will HMRC continue with debt collectors til struck off?

Cheers!

 

[Spongebob]

When you say the returns are due at the end of the month what are you referring to?

VAT return?
Accounts?
Confirmation Statement?

If it is the Confirmation Statement which is due you could try simply ignoring it. You will receive notice from CH of their intention to strike off the company two months later.

Ignore it.

A couple of weeks after this deadline expires keep an eye on your company status on the CH website. In my recent experience it will suddenly one day read "Dissolved".

Open a bottle and drink to old Spongebob!

If the Confirmation Statement is due soon this process short-cuts the entire Spongebob Plan as outlined in the sticky thread at the top of the forum. You should cause the company to cease trading but there is no need to send out any letters just yet. Simply wait and see if Companies House follows their normal procedure of automatically dissolving companies which fail to submit the Confirmation Statement. The beauty is that creditors (including HMRC) are seemingly not alerted to the imminent dissolution of the company and therefore are unlikely to object to it.

There is no requirement to wait 6 months after ceasing trading before applying to have the company struck off, and there is no onus on you to inform creditors of an application to have the company dissolved, as no such application is made!

The debt collection process will continue until the company is dissolved. The normal tactics of avoiding all contact with agents and making sure that any assets are out of the reach of bailiffs should stall the process sufficiently to give time for the dissolution to take place.

There are few more satisfying moments in life than showing a bailiff proof that the company he has been pursuing for months has been dissolved!

 

[Lisa Thomas]

As I said before you need to take advice form an IP, which you should get for free.

That does not necessarily mean paying them for an insolvency process, just at least taking professional advice.

 

[Goingunder]

As I said before you need to take advice form an IP, which you should get for free.

That does not necessarily mean paying them for an insolvency process, just at least taking professional advice.

Presuming you offer this could you PM a rough idea of cost, how to pay and when I can book in a phone call?

Many thanks

 

[Lisa Thomas]

Of course - I'm around all day today so call whenever is convenient. 01752 786800

 

[Blaby Loyal]

Please be assured that if you can read and write you do not need to incur the costs of an insolvency practitioner to bring this to a legitimate conclusion.

If you do decide to instruct then, for the love of the almighty creator, agree on a fixed fee.

 

[Goingunder]

Many many thanks Lisa for the phone conversation earlier, really recommend anyone who is struggling to phone for advice! Certainly who I will be turning to if I do need an IP.

One quick question r.e Spongebob, do I HAVE to send letters to every creditor together?

The reason I ask is I have a very pushy debt collector on one of my suppliers case and is threatening court proceedings but the solicitor did say if they get the letter they won't bother. Also have VAT man sending letters saying they are focusing on me now as part of a small percentage of companies not paying.

The thinking being my wondering is if I keep quiet and don't do any returns and CH do strike it off and I sit quiet then no one will object?

Or do I just send the letters and let CH crack on anyway? Or just send the letters to this solicitor and maybe VAT.

Just hoping to avoid baliffs/HMRC agents at the inlaws where the company is registered!

 

[Mr D]

Many many thanks Lisa for the phone conversation earlier, really recommend anyone who is struggling to phone for advice! Certainly who I will be turning to if I do need an IP.

One quick question r.e Spongebob, do I HAVE to send letters to every creditor together?

The reason I ask is I have a very pushy debt collector on one of my suppliers case and is threatening court proceedings but the solicitor did say if they get the letter they won't bother. Also have VAT man sending letters saying they are focusing on me now as part of a small percentage of companies not paying.

The thinking being my wondering is if I keep quiet and don't do any returns and CH do strike it off and I sit quiet then no one will object?

Or do I just send the letters and let CH crack on anyway? Or just send the letters to this solicitor and maybe VAT.

Just hoping to avoid baliffs/HMRC agents at the inlaws where the company is registered!

Send the letter. All it will cost you is a stamp and may save you some time and aggro from debt collection.
Don't send the letter and any creditor will carry on doing its debt collection routine. They can do that after the letter too of course but at least they then they will know what the situation is.
Expect some including HMRC to chase the company for payment until it is dissolved no matter what you send.

You cannot avoid agents or bailiffs turning up at the address, short of providing a new address for the company. Not that they can do much with a residential property or a place your business is not at.

 

[Spongebob]

Sending the letter to all creditors- particularly HMRC - is an exercise in arse covering.

It gives creditors the specific information that the company has ceased trading as per a particular date. It protects you from potential future allegations that the company traded while insolvent. It also informs creditors that the company is completely skint and that there is no point spending further money or resources pursuing the debt.

It is doubtful that HMRC will respond directly to the Spongebob letter, but it go into your file.

There is anecdotal evidence from many followers of the Spongebob Plan that HMRC go quiet after the letter is received other than the normal computer generated letters. I suspect that this is the case and that their field agents are directed to companies where there is more chance of recouping significant monies.

The letters buy time. If the company’s Confirmation Statement becomes due in the interim simply not submitting it will automatically dissolve the company within 12 weeks.

 

[Lisa Thomas]

Many many thanks Lisa for the phone conversation earlier, really recommend anyone who is struggling to phone for advice! Certainly who I will be turning to if I do need an IP.

You are welcome. Best of luck with everything.

 

[Goingunder]

Guys I emailed over the letter to someone chasing for money and their solicitor wrote back saying they have told her to continue with the case and have issued a county court claim.

I suggested to her previously on the phone it was a waste of time and she had agreed.

The biggest worry is debt collectors turning up at the inlaws but what can I do!

Just thinking strategically the best way to stall this out.

 

[Blaby Loyal]

The only sure way to avoid bailiffs is to pay the creditor, failing which just hold fast and stick to your plan.

 

[Goingunder]

Thanks guys.

One last question, I am moving within a few weeks and out of my in laws.

What do I do, change address of company or what?

I was thinking of using a virtual office in London.

Realised yesterday confirmation statement not due til March! Doh!

 

[Goingunder]

May 28th even!

 

[Goingunder]

Hi quick question. Every debt collector chasing keeps advising that company is still active on HMRC website.

I don't need to change that do I?

Also have received a county court claim form. Should I just ignore it? No point filling it in is there?

Thanks!

Also one last question CH has said I need to file accounts within 14 days if I want to remain active. If I dont will they shut it down?

 

[Blaby Loyal]

If you have notified all of your creditors and the debt collectors then do nothing.

I am not aware of an HMRC website that numpty debt collectors would have access to.

Let Companies House follow their procedures.

 

[Spongebob]

End of the day there is nothing that debt collectors can actually do if there are no company assets for bailiffs to seize.

Just brazen it out.

Don’t submit anything more to Companies House and they will eventually dissolve the company.

Resist the understandable urge to have to DO something. The best course of action is to do absolutely nothing.

Always remember that while to you your predicament is of the utmost importance, to everyone else it is of little or no significance.

 

[Pendulum]

Have I understood correctly, that you were stupid enough to list your in-laws' home address in connection to the company? If so, then if you haven't already done this, you should warn your in-laws what might happen, and tell them not to open the door. It's all well and good some people telling you that if there are no company assets in the home the bailiffs can't do anything, but in practice those scum will not let that stop them. Haven't you seen the bailiff shows on TV in recent years?

If given an open door they will force their way in and scare the funk out of your innocent, unconnected in-laws. They will try to bully them in to making a payment on behalf of the company, dressing it up as them helping you. If they don't manage to extort a cash, debit card or bank payment they will then 'take control' of anything of value which the occupants can't produce receipts for. Is it legal? Probably not, but that doesn't stop them doing it, and not just in real life but also on TV where it's plain to see.

If you did put them at risk like that then you should be ashamed.

Changing the address now would be too late; it's already known to the current debt collectors.

 

[Goingunder]

My Mrs did it unfortunately as we had a few issues with post at prev address.

I was not happy.

Anyway I was thinking of register it in London at a virtual office then just giving them a copy of the change so they can hand it to any bailiffs.

I work 5 mins away from theirs so can be home within 5 mins if they do come.

 

[Blaby Loyal]

If you are thinking of changing the registered office address, check with Companies House first to make sure it doesn't reset the clock as far as striking off is concerned.

 

[Pendulum]

My Mrs did it unfortunately as we had a few issues with post at prev address.

I was not happy.

Anyway I was thinking of register it in London at a virtual office then just giving them a copy of the change so they can hand it to any bailiffs.

I work 5 mins away from theirs so can be home within 5 mins if they do come.

It might be too late to be worth you bothering to get a virtual address at this point. They already have the house address, and will definitely try it if they don't get a scent elsewhere.

As somebody else pointed out, it might also interfere with the imminent dissolution of the company so not worth the risk. In your situation I wouldn't even do it if a friendly person on the line from CH promised it would do no harm.

Out of curiosity, is the house listed as the registered office, a place of business, or both?

In any event, I think your in-laws should put up a notice on the front door stating words to the effect: callers are formally warned that (company name) has no legitimate connection to this residential property and owns nothing located at the property. The address was used without the knowledge or consent of the owners. The owners have no connection to the company. Any callers for the company are not welcome, and their implied right of access is formally removed as of the completion of reading this notice, meaning that if they set foot on to the property (including all outside areas) they will be trespassing, and reported to the police as intruders with no lawful authority to be present.

Start collating receipts for all valuable possessions that could conceivably be mistaken for company assets, including any vehicles not on finance, whether yours, the wife's, or theirs. Even if you all suffer the embarrassment of putting up the door notice to give some level of potentisl protection, which I bet you won't because it is so embarrassing to neighbours and other callers, they'll probably still manage to bully/trick their way in somehow as someone will let their guard down or get nervous. Ensure they are filmed at every stage, and ignore their lies if they say it isn't legal for you to record them - it is, anywhere at all in public or on your own property. Take duplicates/back ups of all receipts prior to their arrival, in case when you show them they don't give them back. Trust nothing they say, including the extent of their powers which some of the time they lie about or don't even fully understand themselves.

Brief your in-laws about what might happen! Many people will say I'm over reacting, but these nasty things do happen sometimes, and if they aren't mentally prepared it will go badly if they do get a visit...

 

[Spongebob]

This is s useful reminder that it always a good idea to use your accountant’s office or an accommodation address as your company’s registered office - from day one.

 

[Goingunder]

2 CCJs against us now one from parts supplier and one from companies house for a fine.

Still just ignore everything?

Still worried about bailiffs.

Also had a letter on 6th March stating we must file accounts in 14 days or strike off starts.

 

[Goingunder]

It does say it will be in Gazette though!

 

[Goingunder]

Also we havent been trading for 3 months now do I do anything there?

Not sure whether to speak to companies house and ask whether a change of address is a good idea or it will mean we have been trading.

I can register it at my empty workshop.

 

[Scalloway]

Also had a letter on 6th March stating we must file accounts in 14 days or strike off starts.

Then Companies House are doing the job for you.

 

[Mr D]

2 CCJs against us now one from parts supplier and one from companies house for a fine.

Still just ignore everything?

Still worried about bailiffs.

Also had a letter on 6th March stating we must file accounts in 14 days or strike off starts.

Bailiffs can take what business assets?
'The business has ceased trading and has no assets' is often what is quoted as to say to them.