HMRC call trying to get me to take on business debt personally

[Keith Duffy]

Afternoon,
Ran my own Ltd Company which unfortunately has ceased trading 2 years ago. Still submitting accounts as required but no money in business to wind it up. I've just had a call from HMRC and the advisor asked my personal circumstances she said well we want to see if you have the capacity to pay it off. When I pointed out its not my debt so why would I she said as a director you're responsible. Has anyone else had experience of this, I told her the debts not mine but the companies and she shouldn't be trying to give me incorrect advice she wasn't interested.

 

[japancool]

Dissolve the company.

 

[Keith Duffy]

Dissolve the company.

I can't pay an insolvency practitioner and HMRC will object won't they?
Just annoys me the government is trying to get someone to take on debts they don't owe, seems dishonest

 

[ChrisCallaghan]

I can't pay an insolvency practitioner and HMRC will object won't they?
Just annoys me the government is trying to get someone to take on debts they don't owe, seems dishonest

No harm in attempting to strike off if there are no funds available to fund liquidation costs. It's likely HMRC will object, but it might sneak through. If they object, then you wouldn't have breached any of your director duties, so long as you write to all of your company's creditors advising them of your intent to apply for strike off.

What's the total HMRC debt? Any other debts, e.g. Bounce Back Loan?

 

[ChrisCallaghan]

Sorry Keith, I didn't answer your question - no, I have not known HMRC to ask a director about their personal finances when chasing Ltd company debt. Do you have any outstanding personal taxes?

 

[fisicx]

Are you sure the call was from HMRC. I get any number of scammers calling pretending to be from one department or another.

 

[Elliot Green]

Afternoon,
Ran my own Ltd Company which unfortunately has ceased trading 2 years ago. Still submitting accounts as required but no money in business to wind it up. I've just had a call from HMRC and the advisor asked my personal circumstances she said well we want to see if you have the capacity to pay it off. When I pointed out its not my debt so why would I she said as a director you're responsible. Has anyone else had experience of this, I told her the debts not mine but the companies and she shouldn't be trying to give me incorrect advice she wasn't interested.

Without a Personal Liability Notice being issued by HMRC it is difficult to follow the caller's rationale.

 

[Keith Duffy]

Sorry Keith, I didn't answer your question - no, I have not known HMRC to ask a director about their personal finances when chasing Ltd company debt. Do you have any outstanding personal taxes?

No outstanding personal tax debt, the business owes corporation tax, a small amount of vat, BBL and about 4k to me as directors loan

 

[Keith Duffy]

Are you sure the call was from HMRC. I get any number of scammers calling pretending to be from one department or another

Are you sure the call was from HMRC. I get any number of scammers calling pretending to be from one department or another.

I thought about that afterwards, whole thing was just a bit odd. Apparently her manager is going to call me after I complained that she shouldn't be giving incorrect information (that the debt was my personal responsibility)

 

[ChrisCallaghan]

No outstanding personal tax debt, the business owes corporation tax, a small amount of vat, BBL and about 4k to me as directors loan

Thanks. Unfortunately that means strike off is unlikely to be successful due to the outstanding BBL, but still no harm in trying. In particular you may also wish to invite creditors (in particular HMRC) to wind the company up for you. The following template letter may be helpful to you:

Considering strike off | Sample letter | Business Debtline

Use this letter to tell your creditors and members of your limited company that you are considering strike off.

www.businessdebtline.org

Unless HMRC are seeking a personal liability order, which is very uncommon and usually relates to very specific and identified wrongdoing on your part, I can't see any reason for them to enquire about your personal financial position.

If you are finding the level of contact from HMRC frustrating, and wish to see the closure of your company sped up, then you could consider privately funding the cost of a Voluntary Liquidation, but from your earlier posts I understand that's not an option for you presently.

 

[ChrisCallaghan]

I thought about that afterwards, whole thing was just a bit odd. Apparently her manager is going to call me after I complained that she shouldn't be giving incorrect information (that the debt was my personal responsibility)

Please let us know how you get on!

 

[Keith Duffy]

Thanks. Unfortunately that means strike off is unlikely to be successful due to the outstanding BBL, but still no harm in trying. In particular you may also wish to invite creditors (in particular HMRC) to wind the company up for you. The following template letter may be
Unless HMRC are seeking a personal liability order, which is very uncommon and usually relates to very specific and identified wrongdoing on your part, I can't see any reason for them to enquire about your personal financial position.

If you are finding the level of contact from HMRC frustrating, and wish to see the closure of your company sped up, then you could consider privately funding the cost of a Voluntary Liquidation, but from your earlier posts I understand that's not an option for you presently.

Thanks for you reply, the company owes me 4k already and rising every year as I pay for accounts and confirmation statements to be filed.
Sent my accounts to the BBL company showing no trading and no assets and heard nothing since.
Dont really want to pay more money so will send letter to HMRC and BBL bank and wait three months then try to strike off

Please let us know how you get on!

Thanks for you reply, the company owes me 4k already and rising every year as I pay for accounts and confirmation statements to be filed.
Sent my accounts to the BBL company showing no trading and no assets and heard nothing since.
Dont really want to pay more money so will send letter to HMRC and BBL bank and wait three months then try to strike off

 

[ChrisCallaghan]

Thanks for you reply, the company owes me 4k already and rising every year as I pay for accounts and confirmation statements to be filed.
Sent my accounts to the BBL company showing no trading and no assets and heard nothing since.
Dont really want to pay more money so will send letter to HMRC and BBL bank and wait three months then try to strike off

Thanks for you reply, the company owes me 4k already and rising every year as I pay for accounts and confirmation statements to be filed.
Sent my accounts to the BBL company showing no trading and no assets and heard nothing since.
Dont really want to pay more money so will send letter to HMRC and BBL bank and wait three months then try to strike off

Sounds like the appropriate thing to do. For what it counts, if you're going down the route of inviting creditors to wind up your company + attempt to strike off, no need to file any further accounts or confirmation statements.

 

[Lisa Thomas]

Sorry Keith, I didn't answer your question - no, I have not known HMRC to ask a director about their personal finances when chasing Ltd company debt. Do you have any outstanding personal taxes?

Me neither. Sounds very fishy.

 

[Keith Duffy]

Me neither. Sounds very fishy.

Well just had a call from the supervisor and he said apologies she just jumped a few steps but they are entitled to ask about my personal circumstances, when I pointed out that my circumstances have nothing to do with the business he said they can still ask.
He then asked about business assets and I said there are none I can send in my accounts to prove that and it owes me money he said no you don't need to do that I'll pass that onto our collectors.

 

[Keith Duffy]

Please let us know how you get on!

Supervisor phoned me this morning, apologised as apparently she went a step or two too far and shouldn't have asked me about me personal circumstances yet. Then asked about business assets - said there are none and can send my latest accounts to prove it, he said no point.
Still seems really odd tbh

 

[ChrisCallaghan]

Supervisor phoned me this morning, apologised as apparently she went a step or two too far and shouldn't have asked me about me personal circumstances yet. Then asked about business assets - said there are none and can send my latest accounts to prove it, he said no point.
Still seems really odd tbh

The only logic I can gather is that they may be considering which cases to prioritise for potential winding up action, on the off chance that there may be collectable overdrawn director loan accounts, but that is just a mildly educated guess.

Do you know if your directors loan account is overdrawn?

 

[Keith Duffy]

The only logic I can gather is that they may be considering which cases to prioritise for potential winding up action, on the off chance that there may be collectable overdrawn director loan accounts, but that is just a mildly educated guess.

Do you know if your directors loan account is overdrawn?

It shows as a debt on the accounts so the business owes me money, explained that to the advisor and supervisor

 

[FingerBob]

Afternoon,
Ran my own Ltd Company which unfortunately has ceased trading 2 years ago. Still submitting accounts as required but no money in business to wind it up. I've just had a call from HMRC and the advisor asked my personal circumstances she said well we want to see if you have the capacity to pay it off. When I pointed out its not my debt so why would I she said as a director you're responsible. Has anyone else had experience of this, I told her the debts not mine but the companies and she shouldn't be trying to give me incorrect advice she wasn't interested.

Sounds like a scam to me

 

[UK Contractor Accountant]

Seems to be the standard HMRC practice to ask about Director paying off the tax Debts - I queried it as well with HMRC Supervisor who gave the same response above but added we do check as in some cases the Director is prepared to pay off the company's tax depts as they dont want it to affect their credit file. (whether it does is another question alltogether!)

 

[Fagin2021]

This could be a bit disingenuous of HMRC. A tax debt might affect your credit file (with HMRC) but does it affect your credit score (eg, with Experian) ?

I've heard that a tax debt (unlike other debts (unpaid loans/credit cards etc) doesn't affect your credit score. Whether this is true or not I couldn't say and would be interested to hear the answer from someone who does.

 

[ChrisCallaghan]

More importantly, non payment of HMRC liabilities from a company (e.g. a Ltd, as in OPs case) would not affect's its directors' personal credit scores in a way.

 

[fisicx]

More importantly, non payment of HMRC liabilities from a company (e.g. a Ltd, as in OPs case) would not affect's its directors' personal credit scores in a way.

I thought there was now a connection. Where banks look at a director’s history when considering personal credit and whatever.

 

[ChrisCallaghan]

They may choose to look at a director's history, usually via Companies House, true, but this is not the same as something being listed on against a personal credit rating.

Usually this is only when the person applying for finance has listed their company as the main source of income.

E.g. if a company director is applying for a personal mortgage, and their main source of income is their company, naturally they will do checks on the company, and possibly the lender's history as a director.