How long to wait for tax refunds from estate of Ltd Co after MVL?

[anonpreneur]

I entered my Ltd company into an MVL via an IP in August 2023 and I am still waiting on a final distribution from the IP for funds due from Corporation tax and VAT refunds.

The IP are claiming that the delay is due to the accountants not submitting these returns prior to the MVL commencing, even though I was assured this was taken care of. This was apparently taken care of eventually at the end of 2024.

The latest communication from IP in May of this year states that they have been issued with a partial refund from HMRC (A fraction of the overall total owed), they are chasing HMRC and would escalate to a formal complaint.

My question is do I have any options here other than to simply sit and wait?

 

[pentel]

It took around 4 years for HMRC to send VAT refund to my IP.

 

[Lisa Thomas]

I entered my Ltd company into an MVL via an IP in August 2023 and I am still waiting on a final distribution from the IP for funds due from Corporation tax and VAT refunds.

The IP are claiming that the delay is due to the accountants not submitting these returns prior to the MVL commencing, even though I was assured this was taken care of. This was apparently taken care of eventually at the end of 2024.

The latest communication from IP in May of this year states that they have been issued with a partial refund from HMRC (A fraction of the overall total owed), they are chasing HMRC and would escalate to a formal complaint.

My question is do I have any options here other than to simply sit and wait?

If the reasons for the delays are genuine, then it sounds as if this is out of the IP's hands however it shouldn't take this long (unless it's a S455 refund)

 

[anonpreneur]

If the reasons for the delays are genuine, then it sounds as if this is out of the IP's hands however it shouldn't take this long (unless it's a S455 refund)

Thanks for responding. Do I have any recourse here? As I mentioned, IP are claiming delay was due to the tax returns not being processed prior to the commencement of the MVL so this could be seen as negligence on their part? I'm not entirely convinced that this hasn't been resolved and they are simply sat on the cash.

 

[Lisa Thomas]

Negligence on whose part - the IP, or the accountants?

I think if you want to make a formal complaint, you probably need a bit more information. When did they ask the accountants to complete and submit those tax returns, and when did the accountants comply?

Were you copied into the correspondence between the IP and the accountants?

When did the IP's chase this up with HMRC, and how frequently?

Have HMRC acknowledged receipt of the returns, and confirmed they accept a refund is due?

The threat of making a formal complaint might sharpen the IP up a bit, if they have been slow to act.

The IP's engagement letter should have outlined their complaints procedure but the usual process is to complain to the IP in writing, and then if you are unsatisfied with the outcome to escalate it via the gateway here:

Complain about an insolvency practitioner

How to complain about an insolvency practitioner - complain about unprofessional or unethical conduct or how your case has been handled.

www.gov.uk

 

[Bobbo]

I'm not entirely convinced that this hasn't been resolved and they are simply sat on the cash.

Why would the liquidator want to do this? Presumably everything was wrapped up nicely before entering liquidation (apparently apart from filing tax returns) with a fixed fee agreed - I don't see the benefit to the liquidator in dragging it out.

 

[anonpreneur]

Thanks Lisa, see below:

Negligence on whose part - the IP, or the accountants?

I think if you want to make a formal complaint, you probably need a bit more information. When did they ask the accountants to complete and submit those tax returns, and when did the accountants comply?

Were you copied into the correspondence between the IP and the accountants?

When did the IP's chase this up with HMRC, and how frequently?

Have HMRC acknowledged receipt of the returns, and confirmed they accept a refund is due?

The threat of making a formal complaint might sharpen the IP up a bit, if they have been slow to act.

The IP's engagement letter should have outlined their complaints procedure but the usual process is to complain to the IP in writing, and then if you are unsatisfied with the outcome to escalate it via the gateway here:

I think if you want to make a formal complaint, you probably need a bit more information. When did they ask the accountants to complete and submit those tax returns, and when did the accountants comply?

I have an email dated July 2023 from the accountants stating that the CT600 had been submitted and a refund requested.

According to the statement of receipts and payments on the first anniversary of the MVL in August 2024 the IP claims that they have been chasing the accountants to do this return as it was still outstanding.

When I saw this in October of 2024 when it appears on CH website I queried with the accountants who again confirmed there was nothing outstanding. I then raised with the IP who ignored emails until I threatened (not for the first time) with the IP gateway. This elicited a response claiming that the returns were not submitted properly due to a lack of access to the acccounting software but these were manually processed in October 2024 (I suspect only after I chased this).

Were you copied into the correspondence between the IP and the accountants?

No

When did the IP's chase this up with HMRC, and how frequently?

I have no idea. It feels as if the only time anything gets actioned is when I chase it up.

Have HMRC acknowledged receipt of the returns, and confirmed they accept a refund is due?

I assume so but this hasn't been confirmed.

The threat of making a formal complaint might sharpen the IP up a bit, if they have been slow to act.

i have done this twice already - if you see my other threads you will see this is not the first issue I have had with them.

 

[Lisa Thomas]

Good luck -hope it gets sorted soon.

 

[Elliot Green]

Why would the liquidator want to do this? Presumably everything was wrapped up nicely before entering liquidation (apparently apart from filing tax returns) with a fixed fee agreed - I don't see the benefit to the liquidator in dragging it out.

It is a bit of a leap, potentially, to assume that all taxes are neatly packaged up before liquidation. There's lots of things that can go a little bit out of sync where HMRC tax is concerned on liquidation.

It is unlikely an IP would want to drag it out. All that does is spark a potential complaint and leave an unhappy client.

 

[Gavin Bates]

I appreciate this is very frustrating, but we have examples where HMRC claimed not to have received returns, and then when presented with the evidence they were submitted, they accept they have received them.

The good news is that HMRC are getting better so hopefully it will be concluded soon.

Best Wishes

 

[anonpreneur]

I have since discovered that the IP has been subject to a disciplinary consent order in another case for failing to submit forms on time.

This led me down a path of looking into whether there has been negligence in my case and ChatGPT tells me that not submitting the CT600 until 14 months after winding up could be deemed negligent as the deadline is 12 months?

Could anyone confirm if this is correct?

 

[Gavin Bates]

Is the CT period pre or post the appointment of the liquidator?

I am afraid Chat GPT isn’t correct because the appointment of the liquidator starts a new accounting period so the first CT return is due 12 months after the appointment. https://www.gov.uk/company-tax-returns Confirms you have 12 months to file a CT return after the period end so technically 24 months after appointment.

In practice we would file returns within a month of the anniversary as you will want to make your receipt an payment account reconciled with your bank account.

I hope this helps