Desperate Situation with DLA 100K

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andrewJC

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Apr 7, 2008
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So the change in life style has only come about since feb / march 2017. Yes I did tell accountant. However I didn't quite realise that the significant part of the tax bill was related to balancing out the DLA and when I say balancing it this is balancing it form a tax point of view. As I am effectively 12 months behind as no sooner do I clear the directors loan, it then reappears as I had to rob almost my full years funds to pay off the year before DLA.
 
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andrewJC

Free Member
Apr 7, 2008
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But to answer your question yes 2017 has been a dramatic difference in my drawings. The 6 months April - September my drawings were 23K at the same time I paid 9K. But still not sure how that helps me as I would need to have a high profit to start lowering the DLA.
 
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Something doesn't add up here (obviously), you say small DLA and you clear this each year, no real issues with that personally but what are you taking each month/year that would be considered a DLA? how or why were you advised to you to take a DLA and clear this every year?

Did your accountant not consider or advise you on HMRC's view of 'bed and breakfasting'??

Rule #1 - set aside an amount to cover tax and VAT, do not touch this money
Rule #2 - start paying yourself properly as its obvious things are out of control and you aren't on top of them
Rule # 3 - get another accountant or at minimum speak to the current one and fully understand what you are doing
 
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The 9 month limit for repaying your DLA is not to do with interest- as it is over £10K beneficial loan intereat should have been declared on end of tax year P11D anyway.

The 9 month limit is to stop the holding tax charge at 32.5% being charged to the company on the loan amount.
 
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KAC

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May 7, 2017
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Lisa Thomas

Business Member
Apr 20, 2015
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You need to have a proper conversation with your accountant or change accountants.

Your accountant should be able to clearly show what money you owe in tax, when it is due and how this has been calculated. This is of course provided you give him all the information they need.
 
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Lisa Thomas

Business Member
Apr 20, 2015
3,897
554
You need to have a proper conversation with your accountant or change accountants.

Your accountant should be able to clearly show what money you owe in tax, when it is due and how this has been calculated. This is of course provided you give him all the information they need.
Agreed.
 
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andrewJC

Free Member
Apr 7, 2008
12
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Yes I have spoken with Business debt line. They suggested that I do not hire a liquidator and to go down the route of strike off and let HMRC then decided if they are going to Liquidate.

Yes I am guilty for sure of essentially taking more out and it was out of control. I am guilty of spending half my time away from home with a very demanding job and spending little time looking at what was happening. It was a time bomb waiting to go off. What I can say is that I never set out to use the company to avoid tax.
I am clear of what tax I now owe for the remainder of this tax year and the next tax year. But this projection tells me that I will not be any where near able to pay this now I am on half the rate I was before. So I am facing losing everything now.
 
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They suggested that I do not hire a liquidator and to go down the route of strike off and let HMRC then decided if they are going to Liquidate.
I would advise you to appoint your own 'friendly' liquidator if HMRC start winding up proceedings rather than deal with the Official Receiver and their engaged Solicitor to chase repayment of your DLA.
 
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Lisa Thomas

Business Member
Apr 20, 2015
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If you appoint a Lqr yourself you can potentially agreed the DLA repayment pre Lqn so you know where you stand before Lqn.
 
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andrewJC

Free Member
Apr 7, 2008
12
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I did engage with a Liquidator and was reasonably satisfied that she would be able to help put together a repayment offer on the DLA. However where there was a critical gap is that i still owe 19K personal tax for the on account Jan and July 2017. Much of this being a dividend to cover the 100K DLA. She was not able to comment on that. Crucially if know body knows what happens about that 19K debit its virtually impossible to prepare a budget to offer a re payment on the DLA.
 
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Lisa Thomas

Business Member
Apr 20, 2015
3,897
554
Not necessarily, you can presume its a debt to be paid and adjust your available income to pay back the DLA/a contribution accordingly. If the £19k does not become payable you can then increase the DLA repayments accordingly.
 
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