Old corporation tax demand - when do they time out?

[JamesinDerby]

I recently received a corporation tax demand from the HMRC that relates to the 2015/16 year and was applied in 2017.

I've never received any demand or chasing notice about it before a few weeks ago. They've now handed it to the usual DCA.

Is this timed out under the 6-year civil procedures rule? Also, possibly, under the HMRC's own guidelines?

If so, should I just ignore unless they take it to court and do they need to raise a court claim in order to move to bailiffs?

thanks in advance for any help/info
James

 

[ChrisCallaghan]

Hi @JamesinDerby ,

Is this timed out under the 6-year civil procedures rule? Also, possibly, under the HMRC's own guidelines?

I'm afraid this does not apply to HMRC, as they are not an optional creditor.

If so, should I just ignore unless they take it to court and do they need to raise a court claim in order to move to bailiffs?

Is your company still trading? Do you dispute this debt? How much are we talking about?

 

[JamesinDerby]

Hi @JamesinDerby ,



I'm afraid this does not apply to HMRC, as they are not an optional creditor.


Is your company still trading? Do you dispute this debt? How much are we talking about?

Thanks for replying Chris.

It's just over £5K.

I don't dispute the figures.

 

[ChrisCallaghan]

If so, should I just ignore unless they take it to court and do they need to raise a court claim in order to move to bailiffs?

Also they do not need to raise a court claim to instruct bailiffs, for the same reason as the 6 year rule not applying.

 

[ChrisCallaghan]

Thanks for replying Chris.

It's just over £5K.

I don't dispute the figures.

Is your company still trading?

 

[JamesinDerby]

Is your company still trading?

It's just recently ceased trading. I'm applying for it to be dissolved.

 

[ChrisCallaghan]

It's just recently ceased trading. I'm applying for it to be dissolved.

Have you already applied to dissolve the company?

Are there any other debts outstanding in the company's name?

 

[JamesinDerby]

Have you already applied to dissolve the company?

Are there any other debts outstanding in the company's name?

Small HMRC ones (that I'm clearing) and a bank BBL loan of just under £7K.

 

[ChrisCallaghan]

Small HMRC ones (that I'm clearing) and a bank BBL loan of just under £7K.

Thanks James,

If you are attempting to dissolve a company with outstanding debts, you need to ensure that you have ceased to trade for at least 3 months before making the application, and you also have a legal obligation to write to the creditors to inform them of your intent to apply for a dissolution.

For further help on the above, please see the popular guide below:

CLOSING A LIMITED COMPANY WTH INSUFFICIENT FUNDS WITH WHICH TO PAY AN INSOLVENCY PRACTITIONER

CLOSING AN INSOLVENT LIMITED COMPANY WITH INSUFFICIENT FUNDS WITH WHICH TO PAY AN INSOLVENCY PRACTITIONER If a company is unable to carry on trading due to becoming insolvent the standard procedure for closing it down is for the directors to appoint an Insolvency Practitioner to liquidate it...

www.ukbusinessforums.co.uk

Alternatively see the below template letter from a business debt charity:

Considering strike off | Sample letter | Business Debtline

Use this letter to tell your creditors and members of your limited company that you are considering strike off.

www.businessdebtline.org

Unfortunately creditors do have a right to object to a dissolution process. HMRC frequently exercise this right, and I'm afraid BBL lenders and/or the Department of Business & Trade (as due to the BBL government guarantee) always object, and for now will continue to object indefinitely. HMRC may come forward to force the company into liquidation (as explained in the above guide), but I think that is unlikely for the amounts owed. Likewise I'm afraid BBL lenders are not coming forward to force companies into liquidation. Typically you will find yourself left with a company in limbo, still legally in existence.

I stress that you are not personally liable for these debts, and there's nothing wrong with trying to close the company in this way, however so long as the company continues to exist, debt enforcement action can continue.

Have you considered exploring a Voluntary Liquidation? Myself or any of the insolvency regulars on this forum would be happy to offer you free advice on this option.

 

[ChrisCallaghan]

P.S. in addition to advising on liquidation, I'd be happy to offer further advice on the dissolution process for an indebted company.