Monies owed to a dissolved company

[Red Wood]

Interesting one, a supplier is now dissolved, we still have an outstanding invoice with them that had a long settlement date (6 months).

They don't seem concerned with the outstanding invoice as they were dissolved in good standing... what is standard practice on next steps?

 

[DontAsk]

Put the money aside and wait.

 

[Frank Wessely]

Legally, that debt which is owed to the dissolved company is now owned by the Crown, which in these cases is usually handled by the Treasury Solicitor. I would not expect this to go any further.

 

[MikeJ]

I've heard of "bad debts" but never a "bad credit".

Congratulations!

 

[Red Wood]

Wish they were a more regular occurrence ?

 

[Newchodge]

Legally, that debt which is owed to the dissolved company is now owned by the Crown

The Crown doesn't need it. Donate it to a worthwhile charity.

 

[Red Wood]

The Crown doesn't need it. Donate it to a worthwhile charity.

This is actually a great idea, thanks.

One question, the invoice in question has vat and is linked to a bill posted some time ago in our ledger. Do we reverse the bill which will positively impact our P&L OR some other process?

 

[Newchodge]

This is actually a great idea, thanks.

Can I recommend the Save the Cyndy Fund? ???

 

[numbersrule]

This is actually a great idea, thanks.

One question, the invoice in question has vat and is linked to a bill posted some time ago in our ledger. Do we reverse the bill which will positively impact our P&L OR some other process?

It would be best to speak to your Accountant as there are Tax Implications.
In general terms, I believe the Charitable Donation would be an allowable amount to be taken off your profits when the CT calculation is done by your Accountant.
So, in this sense, even though a reversal of the purchase would, as you say, increase your Net Profit, in the end your CT Bill would be unaffected.
i e I think Charitable Donations don't appear in the P&L they are treated as 'allowable afterwards in the CT calc.
Regarding VAT, you will have benefitted previously from the effect of the Input VAT being deducted and thereby reducing your VAT bill so the effect of the reversal would be to increase your VAT bill for the quarter of the reversal.
So you could make the Charitable Donation to be equal to the Net amount of the purchase if you wish to remain tax neutral in all areas.
But I am just a Ground Investigator so do speak to your Accountant.
One thing to keep in mind though, if the Charity send you 10 tickets to their Summer Ball, there may be additional tax implications if the value of the tickets is more than 5% of the donation! ?

 

[Lisa Thomas]

The money is now owed to BV. https://www.gov.uk/government/organisations/bona-vacantia I would ask for their written consent before spending the funds on anything else, charitable or not.