Offered a Permanent Position - OVERDRAWN Business Account

Discussion in 'Insolvency' started by NeoDoug, Mar 5, 2018.

  1. NeoDoug

    NeoDoug UKBF Newcomer Free Member

    5 0
    Long time lurker - I signed up to request some advice.

    Limited Company Incorporated - March 2013
    I am the Sole Director. I work in the manufacturing industry as a contractor.
    My current employer wants to give me a permanent position and therefore my LTD company would be surplus to requirements.

    I am up to date with my accounts my 16-17 accounts were paid on time in December, but this put me into my overdraft. This is a carry over from my first 1-2 years of operating whereby I did not leave enough cash in the business to cover accounts, tax etc and the amount I've gone into my overdraft has reduced each year since.

    Currently, I am in my business overdraft by £1300 but this will reduce weekly by around £200 until the date whereby my employment would become permanent - if I take the role I expect this to be in the next 6-12 weeks.

    I have no requirement to submit my 17-18 accounts yet and I am already unregistered from VAT and paid up. How do I go about closing the business in view of the fact that my 17-18 accounts wouldn't be due until December '18? What do I do about my self assessment tax? The likelihood is that I will be out of my overdraft by the time I take up perm employment but would I be liable for any other costs, as obviously there will be little to no money within the business to account for these.
     
    Posted: Mar 5, 2018 By: NeoDoug Member since: Mar 5, 2018
    #1
  2. Scalloway

    Scalloway UKBF Legend Free Member

    14,046 2,993
    You can change the company's accounting date to one just after you cease using it, then submit accounts and pay any tax due. thereafter you can have the company dissolved for a fee of £10.

    https://www.gov.uk/change-your-companys-year-end
     
    Posted: Mar 5, 2018 By: Scalloway Member since: Jun 6, 2010
    #2
  3. NeoDoug

    NeoDoug UKBF Newcomer Free Member

    5 0
    Would the company still be liable for corporation tax for the year 17-18?
    There would be little to no money in the company accounts to satisfy this, is it possible to have the company struck off between now and December '18 - HMRC wouldn't know they are due monies If I haven't filed and would therefore not object?
     
    Posted: Mar 5, 2018 By: NeoDoug Member since: Mar 5, 2018
    #3
  4. Mr D

    Mr D UKBF Legend Free Member

    10,599 1,110
    Did it make a profit in that tax year?
     
    Posted: Mar 5, 2018 By: Mr D Member since: Feb 12, 2017
    #4
  5. NeoDoug

    NeoDoug UKBF Newcomer Free Member

    5 0
    - 17-18 has not finished yet
    - all profits are taken from the company in the form of:
    - wages
    - dividends
    - tax
    - accountancy costs
     
    Posted: Mar 5, 2018 By: NeoDoug Member since: Mar 5, 2018
    #5
  6. Mr D

    Mr D UKBF Legend Free Member

    10,599 1,110
    Then that's your answer.
     
    Posted: Mar 5, 2018 By: Mr D Member since: Feb 12, 2017
    #6
  7. NeoDoug

    NeoDoug UKBF Newcomer Free Member

    5 0
    So linking back to my initial post - the business would be liable - but as there would not be enough money in the business to cover them what do I do?
     
    Posted: Mar 5, 2018 By: NeoDoug Member since: Mar 5, 2018
    #7
  8. Mr D

    Mr D UKBF Legend Free Member

    10,599 1,110
    Liable for what? You've no profits as that's all been taken (presumably dividend and tax relate to previous year?)
     
    Posted: Mar 5, 2018 By: Mr D Member since: Feb 12, 2017
    #8
  9. NeoDoug

    NeoDoug UKBF Newcomer Free Member

    5 0
    The tax and dividends relate to 17-18.

    Current Plan if I accept permanent employment:
    - Cease trading and allow everything to lay dormant for 3 months (is this essential?)
    - Apply to Companies House to be Struck off - DS01
    - Send to bank as a creditor if I am in the Business Overdraft still
    - Send to HMRC (who may block or not depending if they know the business owes money)

    File self assessment at the year end for earnings related to dividends and student loan contributions...will this cause issues?
     
    Posted: Mar 6, 2018 By: NeoDoug Member since: Mar 5, 2018
    #9
  10. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,571 867
    Dividends don't reduce taxable profit.

    The OP probably has an overdrawn directors loan account. When he repays the company, the company can settle its liabilities.
     
    Posted: Mar 6, 2018 By: STDFR33 Member since: Aug 7, 2016
    #10
  11. Mr D

    Mr D UKBF Legend Free Member

    10,599 1,110
    Yes was thinking they were paid this year based on previous year. ie when accounts done.
     
    Posted: Mar 6, 2018 By: Mr D Member since: Feb 12, 2017
    #11