Council tax - limited company

Discussion in 'Insolvency' started by BenJacobs, Jan 26, 2020.

  1. BenJacobs

    BenJacobs UKBF Regular Free Member

    133 6
    I'm the director of a company who manages houses of multiple occupation on behalf of landlords. The company contractually has agreed to paying the utilities / council tax at the property. The company hasn't performed well, and as such, has fallen behind on council tax payments, and is now being asked to pay thousands and thousands of pounds as they've all become due at the same time, and in full. I'm very concerned that these costs can't be met, and that I might be imprisoned for non-payment of council tax, which I believe can happen. Is this right? This all feels so messy. The company has now had an active proposal for strike-off from Companies House. I do not wish to continue running the company, it's driving me crazy every day. Will the council generally object to the strike-off? Will I personally become liable? Will I be imprisoned?
     
    Posted: Jan 26, 2020 By: BenJacobs Member since: Mar 18, 2013
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

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    Any creditor can object to a strike off. Whether they will …..
    Only HMRC seems to be a regular at doing it.

    The contract the company did - presumably its the company being chased for payment, not you personally.

    If companies house don't strike the company off this time then eventually expect them to. Until the company is dissolved however expect creditors to keep calling.
    The company has ceased trading now?
     
    Posted: Jan 26, 2020 By: Mr D Member since: Feb 12, 2017
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  3. BenJacobs

    BenJacobs UKBF Regular Free Member

    133 6
    Yes, it's the company that's being chased for payment of council tax, not myself. The contracts were all in the name of the company. The company has ceased trading, yes. As soon as these all became due, I realised it was not possible to continue. My biggest fear is imprisonment. Is this something that could happen? It terrifies my actually, truth be told.
     
    Posted: Jan 26, 2020 By: BenJacobs Member since: Mar 18, 2013
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  4. Scalloway

    Scalloway UKBF Legend Free Member

    16,162 3,416
    According to this web page.

    https://www.payplan.com/advice/types-of-debt/council-tax-debt/

     
    Posted: Jan 26, 2020 By: Scalloway Member since: Jun 6, 2010
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  5. Mr D

    Mr D UKBF Legend Free Member

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    Don't think I've heard of company being sent to prison for non payment.

    They may try sending bailiffs. Presumably the company has no money or assets?
    In which case you tell any bailiffs at the door / on the phone 'the company has ceased trading and has no money or assets'
     
    Posted: Jan 26, 2020 By: Mr D Member since: Feb 12, 2017
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  6. BenJacobs

    BenJacobs UKBF Regular Free Member

    133 6
    Can the director of the company not be sent to prison for that? I can see that individuals can, not seen about directors of companies, though I'm assuming they can be. May be wrongly assuming though. Yes, with these all hitting at once, it's just not possible, and the profits were slim enough as it is, so it's just pushed it over the edge unfortunately.
     
    Posted: Jan 26, 2020 By: BenJacobs Member since: Mar 18, 2013
    #6
  7. Newchodge

    Newchodge UKBF Big Shot Free Member

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    Why on earth did the company undertake to pay the council tax that was due from the tenants of the properties? Can you sue whichever idiot thought this was a good business model?
     
    Posted: Jan 26, 2020 By: Newchodge Member since: Nov 8, 2012
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  8. NicoJ

    NicoJ UKBF Regular Free Member

    240 45
    Did you not have enough rent to cover the costs or have you been using your client account to cover the company costs?
     
    Posted: Jan 27, 2020 By: NicoJ Member since: Mar 27, 2017
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  9. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

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    It could be possible that the tenants are still liable for the non payment.

    What agreement was in place and was this also an agreement with the council

    I
     
    Posted: Jan 27, 2020 By: JEREMY HAWKE Member since: Mar 4, 2008
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  10. Mark T Jones

    Mark T Jones UKBF Big Shot Free Member

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    Prison is an extremely unlikely as n outcome. To do that would involve them in proving you were criminally negligent I. Your duties.
     
    Posted: Jan 27, 2020 By: Mark T Jones Member since: Nov 4, 2015
    #10
  11. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

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    I would put a decent bet on it that it would be the first time someone got sent to prison for not paying somebody else's poll tax
     
    Posted: Jan 27, 2020 By: JEREMY HAWKE Member since: Mar 4, 2008
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  12. Mr D

    Mr D UKBF Legend Free Member

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    Though this is council tax. Came in after poll tax.
     
    Posted: Jan 27, 2020 By: Mr D Member since: Feb 12, 2017
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  13. Mr D

    Mr D UKBF Legend Free Member

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    You are not liable? You'd usually know if you signed a personal guarantee.
    And prison as a punishment does not generally increase income.
     
    Posted: Jan 27, 2020 By: Mr D Member since: Feb 12, 2017
    #13
  14. BenJacobs

    BenJacobs UKBF Regular Free Member

    133 6
    Jeremy - the tenants at a house of multiple occupation are never ultimately liable to pay council tax, it'd be the landlord and/or managing agent - it wouldn't be themselves who are liable in this case. Single occupation yes, very much so.
     
    Posted: Jan 27, 2020 By: BenJacobs Member since: Mar 18, 2013
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  15. BenJacobs

    BenJacobs UKBF Regular Free Member

    133 6
    Definitely didn't give any personal guarantee. It's all in the limited company name. Does that exempt a prison sentence though?
     
    Posted: Jan 27, 2020 By: BenJacobs Member since: Mar 18, 2013
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  16. UrbanRetail

    UrbanRetail UKBF Regular Free Member

    251 76
    If there is no PG and any contracts were in the ltd company name, the debts belong to the company.

    Companies go bust everyday owing eye watering amounts to HMRC and our prisons certainly aren't full with directors of failed companies.
     
    Posted: Jan 27, 2020 By: UrbanRetail Member since: Mar 3, 2012
    #16
  17. BenJacobs

    BenJacobs UKBF Regular Free Member

    133 6
    That makes perfect sense, thank you. The only thing that was worrying me was that you can be imprisoned for non payment of council tax, whereas other taxes, etc. you can't be (as far as I'm aware). I have read (probably scaremongering myself) that hundreds of people are imprisoned for it. Granted these are likely individuals rather than directors of companies, but I just wanted to double check. It would be an unbelievably relief if it could be definitely clarified that it couldn't happen.
     
    Posted: Jan 27, 2020 By: BenJacobs Member since: Mar 18, 2013
    #17
  18. Mr D

    Mr D UKBF Legend Free Member

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    There's probably one or two in prison. But for rather more than not paying council tax.
    Major fraud, killing people etc - usual stuff. :)
     
    Posted: Jan 27, 2020 By: Mr D Member since: Feb 12, 2017
    #18
  19. Mr D

    Mr D UKBF Legend Free Member

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    Quick google check appears to be none jailed for that offence.
    The business owes the debt, not you. The business gets chased, not you.
    Jailing you for a debt that you don't owe would be …. not beyond British justice. But hopefully very low chance.
     
    Posted: Jan 27, 2020 By: Mr D Member since: Feb 12, 2017
    #19
  20. BenJacobs

    BenJacobs UKBF Regular Free Member

    133 6
    Thanks Mr D, I really appreciate it. Thank you.
     
    Posted: Jan 27, 2020 By: BenJacobs Member since: Mar 18, 2013
    #20