I can't pay vat owed

Discussion in 'General Business Forum' started by Ambi Singh, Apr 17, 2019.

  1. Ambi Singh

    Ambi Singh UKBF Newcomer Free Member

    6 0
    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
     
    Posted: Apr 17, 2019 By: Ambi Singh Member since: Apr 17, 2019
    #1
  2. WaveJumper

    WaveJumper UKBF Enthusiast Free Member

    564 97
    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.
     
    Posted: Apr 17, 2019 By: WaveJumper Member since: Aug 26, 2013
    #2
  3. simon field

    simon field UKBF Big Shot Full Member - Verified Business

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    Sell your house, pay what you owe, and downsize.
     
    Posted: Apr 17, 2019 By: simon field Member since: Feb 4, 2011
    #3
  4. Mr D

    Mr D UKBF Legend Free Member

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    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.
     
    Posted: Apr 17, 2019 By: Mr D Member since: Feb 12, 2017
    #4
  5. Mr D

    Mr D UKBF Legend Free Member

    14,865 1,621
    Not necessary at this point. He doesn't owe the VAT debt yet. The company does.
     
    Posted: Apr 17, 2019 By: Mr D Member since: Feb 12, 2017
    #5
  6. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

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    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 !
     
    Posted: Apr 17, 2019 By: JEREMY HAWKE Member since: Mar 4, 2008
    #6
  7. stugster

    stugster UKBF Legend Full Member

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    How much is the debt?
    Are you the sole director?
    Is winding up your only option?
    Have you discussed payment plans with HMRC?
     
    Posted: Apr 17, 2019 By: stugster Member since: Feb 1, 2007
    #7
  8. Ambi Singh

    Ambi Singh UKBF Newcomer Free Member

    6 0
    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
     
    Posted: Apr 17, 2019 By: Ambi Singh Member since: Apr 17, 2019
    #8
  9. Mr D

    Mr D UKBF Legend Free Member

    14,865 1,621
    Yes I imagine he would be.
    Almost 4 years to clear the debt.

    HMRC appear to prefer clearing debts in 12 months or less.
     
    Posted: Apr 17, 2019 By: Mr D Member since: Feb 12, 2017
    #9
  10. fisicx

    fisicx It's Major Clanger! Staff Member

    30,356 8,922
    So where has the money gone? It was never yours to spend in the first place. Which is why they are chasing you for the debt.
     
    Posted: Apr 17, 2019 By: fisicx Member since: Sep 12, 2006
    #10
  11. WeblinkPlus

    WeblinkPlus UKBF Ace Free Member

    2,784 950
    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 :p 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.
     
    Posted: Apr 17, 2019 By: WeblinkPlus Member since: Sep 13, 2009
    #11
  12. stugster

    stugster UKBF Legend Full Member

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    This is very sage advice.
     
    Posted: Apr 17, 2019 By: stugster Member since: Feb 1, 2007
    #12
  13. Mark T Jones

    Mark T Jones UKBF Big Shot Full Member

    3,153 910
    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)
     
    Posted: Apr 17, 2019 By: Mark T Jones Member since: Nov 4, 2015
    #13
  14. Ambi Singh

    Ambi Singh UKBF Newcomer Free Member

    6 0
    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
     
    Posted: Apr 17, 2019 By: Ambi Singh Member since: Apr 17, 2019
    #14
  15. JEREMY HAWKE

    JEREMY HAWKE UKBF Legend Full Member

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    That's a problem and I was hoping you were going to say it was used in the company !
     
    Posted: Apr 17, 2019 By: JEREMY HAWKE Member since: Mar 4, 2008
    #15
  16. Mr D

    Mr D UKBF Legend Free Member

    14,865 1,621
    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.
     
    Posted: Apr 17, 2019 By: Mr D Member since: Feb 12, 2017
    #16
  17. Herbs

    Herbs UKBF Newcomer Free Member

    18 1
    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......
     
    Posted: Apr 17, 2019 By: Herbs Member since: Apr 12, 2019
    #17
  18. simon field

    simon field UKBF Big Shot Full Member - Verified Business

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    I didn't say he did. But doing that would avoid everybody else having to bail him out wouldn't it.
     
    Posted: Apr 17, 2019 By: simon field Member since: Feb 4, 2011
    #18
  19. Newchodge

    Newchodge UKBF Big Shot Free Member

    12,058 3,121
    Did you pay yourself via payroll or via a director's loan?
     
    Posted: Apr 17, 2019 By: Newchodge Member since: Nov 8, 2012
    #19
  20. Pish_Pash

    Pish_Pash UKBF Ace Free Member

    2,392 605
    Also...he's ponied up our money - we'd all like it back.
     
    Posted: Apr 17, 2019 By: Pish_Pash Member since: Feb 1, 2013
    #20