I can't pay vat owed

Hi I'm the director of a ltd company and I need some help and advice on winding up my company
I've ran up a vat debt and can't pay I've got a vat inspector on my case
The company is going to be struck off by companies house but the vat guy is aware of this and has threatened to make a objection
I own my own house and am worried hmrc will take this off me
The debt is 19856
I have just been using the vat paid to me we can call it mismanagement as this is my First registered company
Can someone please advice me I'm really really stressed

 

Sorry I know this is not what you want to hear but I just don't understand people who set up a company become VAT registered, collect 20% tax on behalf of the government and some how think they can spend it when technically its not their money. The figure sounds quite high so you must have had quite a high turnover too, yes mismanagement. I am sure others will give you a steer on the options open to you.

 

Sell your house, pay what you owe, and downsize.

 

HMRC pretty much will object to business strike off.
And chase for the money.

Possible they will go for winding up - where they get your conduct investigated. I have heard of instances with only a bit higher debt to HMRC wound up.

 

Not necessary at this point. He doesn't owe the VAT debt yet. The company does.

 

Has the money been used for your income or just used in other areas of the company ?

Furthermore it is very bad advice for the usual suspects on here to just say its your fault sell your house ! .
You know the law and company legislation so don't give the wrong advice just because the OP has wound you up !

 

How much is the debt?
Are you the sole director?
Is winding up your only option?
Have you discussed payment plans with HMRC?

 

the debt is 19000 I was deterred from asking for a payment plan as I can afford 100 pw but the vat guy was horrified at my proposal

 

Yes I imagine he would be.
Almost 4 years to clear the debt.

HMRC appear to prefer clearing debts in 12 months or less.

 

Does that figure include penalties...? Penalties can easily more than double the debt.

About 20 years ago I spent tax and VAT money to keep my company afloat while I was ill. I somehow thought I would miraculously recover and go back to work.

Company was eventually struck off by Companies House, and resurrected by HMRC. I was subject to an investigation by the Official Receiver. I was found to be innocent of any wrongdoing, even though I had use the tax and VAT money that wasn't company money. There was no mention as to whether I was innocent of stupidity No further action was taken against me...

The result will likely depend on what you did with the VAT money. If it went to you in some form, then it's likely they may well find fault and seek to recover. If it was spent purely on company expenses. then likely not.

It's also likely that this process will take some time, so put aside your £100/wk in a separate account and if it comes down to it, you can make an offer to the Court of lump sum plus monthly payment.

If no further action is taken, then you'll have a bonus sum put aside.

Oh, and next time, put the VAT money aside (and indeed an allowance for taxes) in a separate account.

 

This is very sage advice.

 

It would be interesting to know where the VAT money has gone in order to give sensible pointers.

If it has just been swallowed in running costs, then you clearly don't have a viable business so need to move on.

If, on the other hands, you blew it on whores & drugs, there may well be a business, so it's worth looking at repayment options.

Beyond that, on the face of it your home isn't at risk, unless there is an overdrawn DLA or an investigation finds you personally liable (statistically low chance)

 

hi the money went on paying myself as I couldn't work due to being ill
I classed it as mismanagement I am really in a dark place at the moment
And I don't know what to do

 

That's a problem and I was hoping you were going to say it was used in the company !

 

At the moment the company owes the money.
Unless that changes in the future then you personally do not owe HMRC for that money.

However if you had an overdrawn directors loan account then that is personal income or a debt to the company which can be chased if the company is wound up.

 

Over what period did you use that money to pay yourself?

If its a year then £20k isn't so bad as it's bare minimum, if it's 2 months on the other hand I would expect them to take a dim view......

 

I didn't say he did. But doing that would avoid everybody else having to bail him out wouldn't it.

 

Did you pay yourself via payroll or via a director's loan?

 

Also...he's ponied up our money - we'd all like it back.