Insolvency / PG / Advice Please

Discussion in 'Insolvency' started by NAK, Mar 6, 2020.

  1. NAK

    NAK UKBF Newcomer Free Member

    11 0
    Hi All,

    Had some good advice earlier from a forum member (Lisa) but had a few further questions

    Situation

    Looking to exit the business as I feel it has become non-viable

    £8500 in business account
    £750 credit with HMRC via PAYE contributions

    £1900 VAT due (paid quarterly, calculated in my accounting software but not sent to HMRC yet)
    £3000 due to a supplier end of March (I would like to honour this if possible)
    £9000 business credit card debt - that is legacy of my former co-founder and director....the business bought him out 18mths ago and I took on the business. I have been servicing this as an operating debt on a monthly basis

    I have been paying myself PAYE, do my own tax returns, submissions and have nothing outstanding here other than the...non-submitted Vat return I refer to above....I don't have an accountant.

    I really need to pay myself again this month so potentially a further £1500 to be deducted from the business account.

    What are my options?

    Thanks for your help.
     
    Posted: Mar 6, 2020 By: NAK Member since: Mar 6, 2020
    #1
  2. Mr D

    Mr D UKBF Legend Free Member

    22,126 2,604
    You can't prefer one debt over another. Treat them equally badly.
     
    Posted: Mar 6, 2020 By: Mr D Member since: Feb 12, 2017
    #2
  3. NAK

    NAK UKBF Newcomer Free Member

    11 0
    Is it best to pay VAT and then creditor and then look to strike a deal with the credit card company?

    Is it realistic to think this can happen?
     
    Posted: Mar 9, 2020 By: NAK Member since: Mar 6, 2020
    #3
  4. NAK

    NAK UKBF Newcomer Free Member

    11 0
    Also one other thing - my confirmation statement is due shortly - do I not file this given my intentions?
     
    Posted: Mar 9, 2020 By: NAK Member since: Mar 6, 2020
    #4
  5. Mr D

    Mr D UKBF Legend Free Member

    22,126 2,604
    Split money between each debt pro rata. You strike a deal with the card company personally if you did sign a personal guarantee for that debt.
    Otherwise gets treated exactly like all the other company debts.
     
    Posted: Mar 9, 2020 By: Mr D Member since: Feb 12, 2017
    #5
  6. Mr D

    Mr D UKBF Legend Free Member

    22,126 2,604
    Yes don't file it.
     
    Posted: Mar 9, 2020 By: Mr D Member since: Feb 12, 2017
    #6
  7. NAK

    NAK UKBF Newcomer Free Member

    11 0
    Thanks Mr D.

    On the CC debt - this is legacy debt that transferred when I bought my ex business partner out - I did not personally sign a PG - but a PG could be included in the terms and we signed a change mandate form.

    What are your thoughts?
     
    Posted: Mar 9, 2020 By: NAK Member since: Mar 6, 2020
    #7
  8. Mr D

    Mr D UKBF Legend Free Member

    22,126 2,604
    You bought the ex partner out so you personally increased your shares by his total?
     
    Posted: Mar 9, 2020 By: Mr D Member since: Feb 12, 2017
    #8
  9. NAK

    NAK UKBF Newcomer Free Member

    11 0
    Sorry. The company bought him out and he left the business.

    The arrangement was 3 months pay he stayed on to help deliver work over that 3 month period.....shares transferred to me.
     
    Posted: Mar 9, 2020 By: NAK Member since: Mar 6, 2020
    #9
  10. Mr D

    Mr D UKBF Legend Free Member

    22,126 2,604
    If the company bought him out and presumably the company has been paying the debt, would there be any new personal guarantee at all?

    Did the previous director get the creditor to reassign the personal guarantee? If not then may still be with him.
     
    Posted: Mar 9, 2020 By: Mr D Member since: Feb 12, 2017
    #10
  11. NAK

    NAK UKBF Newcomer Free Member

    11 0
    Correct. The company has been servicing the debt since the other director left.

    The only forms we signed were change mandate forms, so is it as simple as checking with with the credit card company? I have certainly not (knowingly) signed a PG

    Thanks
     
    Posted: Mar 9, 2020 By: NAK Member since: Mar 6, 2020
    #11
  12. Mr D

    Mr D UKBF Legend Free Member

    22,126 2,604
    Then once the company stops paying the debt - could be the credit card company implements its signed personal guarantee (if they have one) and chase the relevant person.

    If they chase you, ask for copy of personal guarantee signed by you. Some companies try it on to get payment when they don't have anything.
     
    Posted: Mar 9, 2020 By: Mr D Member since: Feb 12, 2017
    #12
  13. NAK

    NAK UKBF Newcomer Free Member

    11 0
    So a sensible course of action would be:

    1. Do not renew confirmation statement
    2. Pro-rata debt to the creditors - overpayment of PAYE / NICs will be offset against VAT I assume
    3. Wait to see the response from the CC and look to cut a deal if there is a PG I am unaware of?

    Thanks
     
    Posted: Mar 9, 2020 By: NAK Member since: Mar 6, 2020
    #13
  14. NAK

    NAK UKBF Newcomer Free Member

    11 0
    Sorry. As is the case new questions pop in to my head I you start to uncover things.

    I have done my own VAT return for the last quarter but have not submitted to HMRC yet the liability is £1900 - given my circumstance do I have to submit or will this die with the company if I don't renew my confirmation statement.

    Apologies if it appears I am jumping around - I just want to make sure I follow the best possible course of action within the law.
     
    Posted: Mar 9, 2020 By: NAK Member since: Mar 6, 2020
    #14
  15. NAK

    NAK UKBF Newcomer Free Member

    11 0
    **UPDATE**

    Had it confirmed today over the phone that the credit card debt is not PG and is covered by Ltd company. Result.

    Things seem a little clearer now
     
    Posted: Mar 10, 2020 By: NAK Member since: Mar 6, 2020
    #15
  16. MikeJ

    MikeJ UKBF Big Shot Free Member

    5,772 1,674
    The debt is still valid though. You can't pay everything else off, and yourself a salary, and then tell the credit card company to whistle.
     
    Posted: Mar 10, 2020 By: MikeJ Member since: Jan 15, 2008
    #16
  17. NAK

    NAK UKBF Newcomer Free Member

    11 0
    Thanks Mike I understand that.

    Plan is to pay - myself as I need to in order to cover bills etc and then pro-rata the debts.
     
    Posted: Mar 10, 2020 By: NAK Member since: Mar 6, 2020
    #17
  18. ethical PR

    ethical PR UKBF Legend Free Member

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    You can't pay yourself in preference with company money, as already mentioned a number of times in this thread. The money left in the company is to pay company debts, not your personal ones.

    It is irrelevant that you have bills to pay.

    If you have personal debts you cannot pay I would suggest you work with the government's free Money Advice Service to negotiate paying off the debt in stage payments, review your personal budget and cut out non essentials ie. holidays, gym, mobile phone, cable TV and make it a priority to secure employment.
     
    Posted: Mar 10, 2020 By: ethical PR Member since: Apr 19, 2009
    #18
  19. Ian J

    Ian J Factoring Specialist Full Member - Verified Business

    5,967 1,911
    That's fraudulent preference and if you get caught you may well be prosecuted and end up with a criminal record
     
    Posted: Mar 10, 2020 By: Ian J Member since: Nov 6, 2004
    #19
  20. NAK

    NAK UKBF Newcomer Free Member

    11 0
    Not trying to act in a fraudulent manner - I just don't understand the process well enough!

    I want to do the right thing, that is lawful and ensure I can pay my essentials that is all.

    This process is quite stressful.....
     
    Posted: Mar 10, 2020 By: NAK Member since: Mar 6, 2020
    #20