Bounce Back loan - what to do

[David Smithy]

So I ran a vehicle repair business and 'on the side's to speak we sold a few cars.

Business was okay but not great but the car sales side seemed to be doing well.

I registered a LTD company and decided to seperate the 2 companies, found a premises etc.

Covid came and I took 2 BBLs. Now one kept the repair side afloat and the second we thought would push the sales which it did, very briefly.

Then we lost the premises and the landlord scrapped a load of stock.

We bought in a few more vehicles to do up and sell, the repair business then moved premises and just exploded. Doing very very well. BBL being paid no problem.

Now due to some personal metal health issues the car sales company just got neglected. We bought in some tools to do some other bits with the company wanting it seperate to the first.

Then I had absolute hell with insurance.

As I had 2 companies in the motor trade it was near on impossible to get insured.

Literally spent nearly a week getting nothing done just trying to get insured on the first week of moving into a premises after signing a 10 year lease.

Never knew it would be an issue.

So the car sales just died. I tried phoning HSBC no less than 40 times 6 months coming up to the BBL repayments.

I wanted some advice and to extend it to 10 years.

Now I'm not going to pretend I've been phoning every day or even trying to keep the company afloat.

We repaid a few months and have moved from the premises as said so no letters received.

No accounts submitted and no company statement.

Now we still have some stock and equipment.

Finally got hold of HSBC managed to get through security who now say there is no debt as the government have paid it and its closed.

Her advice was go and apply to have it struck off.


Now I'm not sure what to do.

I really don't want the company liquidated.

I really don't want the company active anymore as it is STILL effecting us.

What I'd like to do is shut the company and just pay the full loan back personally at around 500 per month.

I'll keep the stock, sell it all personally and pay the tax.

OR

Do I take a week off work, get what stock I can sorted and raise around 30k leaving the company owing probably around 20k in tax (if I do the returns and list the profit) and BBL payments then send it insolvent?

Or phone HMRC, take the 50 as wages and pay the tax personally?

I know I've acted poorly here, just want to know the best way out.

I don't want the company just shut and gone and then constantly be worrying about a knock on the door.

I don't feel morally I can just walk away either. I'd rather pay the lot and take all stock or at least pay what the stock can.

But from a selfish perspective I don't want it liquidated, so if that means I can pay it personally I'd rather that.

Does anyone know who I can contact to discuss? HMRC? HSBC aren't interested so it seems!

 

[MBE2017]

What does your accountant suggest based on your figures? Hopefully you have kept them aware of your problems?

 

[japancool]

Well, according to HSBC, the company no longer owes any money for the BBL. Why worry about that?

I would sell the stock, then if you want to, submit accounts and pay the tax, then shut the company down. Either do a voluntary liquidation, or get it struck off.

You can't just "keep" the stock. You will need to buy it from the company. You may then be liable for tax on the profit. I would say, just sell it within the company, and do whatever you need to do with the money.

 

[David Smithy]

What does your accountant suggest based on your figures? Hopefully you have kept them aware of your problems?

Haven't got an accountant for said company.

 

[David Smithy]

Well, according to HSBC, the company no longer owes any money for the BBL. Why worry about that?

I would sell the stock, then if you want to, submit accounts and pay the tax, then shut the company down. Either do a voluntary liquidation, or get it struck off.

You can't just "keep" the stock. You will need to buy it from the company. You may then be liable for tax on the profit. I would say, just sell it within the company, and do whatever you need to do with the money.

Thanks.

But surely HMRC or whatever government body will want the 50k back or want to know where it has gone?

 

[MBE2017]

It might be worth talking to an insolvency practitioner, many will give you a free telephone call and outline advice. Plently on this forum, do some quick searches on previous threads.

 

[japancool]

Thanks.

But surely HMRC or whatever government body will want the 50k back or want to know where it has gone?

If you didn't do anything dodgy with it (i.e. you didn't take the money out for your personal benefit), you should be fine. If it was used for the business's benefit, that's what it was for, even if you weren't successful.

 

[Mark T Jones]

Your story itself is a little confused and/or confusing, which is why you really need some dedicated professional advice.

HMRC won't have written off your loan while the company is still active.

Whilst I'm opposed to abuse of BBL to get 'free' money, this really does appear to be a genuine case where multiple factors, including covid have contributed to its failure.

Again get professional advice.

 

[David Smithy]

If you didn't do anything dodgy with it (i.e. you didn't take the money out for your personal benefit), you should be fine. If it was used for the business's benefit, that's what it was for, even if you weren't successful.

No but I would have benefitted personally if the stock gets sold etc.

Like surely someone wants what belongs to the business before writing 50k off?

I wonder if I should just buy the stock at a reasonable amount and pay it to the business monthly.

 

[David Smithy]

Your story itself is a little confused and/or confusing, which is why you really need some dedicated professional advice.

HMRC won't have written off your loan while the company is still active.

Whilst I'm opposed to abuse of BBL to get 'free' money, this really does appear to be a genuine case where multiple factors, including covid have contributed to its failure.

Again get professional advice.

Yes will do just don't know who to phone for advice.

Are you saying HMRC won't have paid HSBC with the company being active?

 

[Mark T Jones]

Yes will do just don't know who to phone for advice.

Are you saying HMRC won't have paid HSBC with the company being active?

If you have an accountant, start with them.

Otherwise, @Lisa Thomas or @Gavin Bates might be able to point you.

Correct, British Business Bank are playing very tough on their guarantee

 

[David Smithy]

If you have an accountant, start with them.

Otherwise, @Lisa Thomas or @Gavin Bates might be able to point you.

Correct, British Business Bank are playing very tough on their guarantee

Weird how HSBC said the account was shut as it had been paid.......

The current account is open and company active.

 

[Mark T Jones]

Weird how HSBC said the account was shut as it had been paid.......

The current account is open and company active.

I may of course be wrong, working on limited information- but I do know that banks have to do everything possible to recover before claiming.

 

[Ozzy]

Moved to Insolvency forum to draw attention of the insolvency experts

 

[Lisa Thomas]

Thanks Ozzy.

David may I ask why you are so against liquidating the company?

Other than the BBL, what other creditors does the company have?

 

[Frank Wessely]

Weird how HSBC said the account was shut as it had been paid.......

The current account is open and company active.

Hi David Smithy, there are clearly a raft of questions to address here. It’s important to deal with the fundamental problems first. I suspect that following a call with an IP, you’ll have a much clearer idea of the options and their implications. Best to do that rather than go back and forth. You are welcome to give me a call, no charge or obligation. Or any of the other IPs in this group would, I am sure, also be happy to discuss. Best regards.

 

[Elliot Green]

David

Suggest you get some advice from one of the Liquidators in this forum.

You appear to have a number of options available to you.

Kind regards

 

[David Smithy]

Apologies I missed a lot of these replies.

I owe nothing but the BBL.

The company has now been dissolved. I'm a bit worried they will re open it.

I did speak to HSBC again and the debt agency and the agency just put it on hold and HSBC could not seem less interested.

The company is now dissolved.

Do you think it is still wise to speak to an IP or just see what happens?

We also have a couple of vehicles left. I think I'm going to sell them and keep the money aside in a drawer.

I've taken some more staff on in my main company and am just sitting in an office now to run things as I cannot afford for this next one to go belly up!

 

[Paul Kelly ICHYB]

Haven't got an accountant for said company.

Your first issue/error was not having an accountant.

The company is now dissolved.

Assuming the BBL was in the name of the company, this is probably a dead issue.

 

[Lisa Thomas]

Apologies I missed a lot of these replies.

I owe nothing but the BBL.

The company has now been dissolved. I'm a bit worried they will re open it.

I did speak to HSBC again and the debt agency and the agency just put it on hold and HSBC could not seem less interested.

The company is now dissolved.

Do you think it is still wise to speak to an IP or just see what happens?

We also have a couple of vehicles left. I think I'm going to sell them and keep the money aside in a drawer.

I've taken some more staff on in my main company and am just sitting in an office now to run things as I cannot afford for this next one to go belly up!

The vehicles/money from the sale of the vehicles belongs to Bona Vacantia.

Bona Vacantia

‘Bona Vacantia’ means vacant goods and is the name given to ownerless property, which by law passes to the Crown. The Treasury Solicitor acts for the Crown to administer the estates of people who die intestate (without a Will) and without known kin (entitled blood relatives) and collect the...

www.gov.uk